Question

Which is one way that the European debt crisis adversely affects the American economy?

Answer 1

The correct answer is D) Some U.S. Banks have indirectly lent money to heavily indebted European countries.

One way in which European debt adversely affects the U.S. economy is in that Some U.S. Banks have indirectly lent money to heavily indebted European countries.

The European debt crisis represents a risk to the United States economy. Some European governments are so indebted that they can no longer pay the interests and the debt. Some U.S. Banks have indirectly lent money to heavily indebted European countries. And if these countries cannot pay back the loans, the U.S. Banks will face some problems and restrictions. Countries like Spain, Greece, and Italy face this problem. In these countries the banking system is not so solid and their economies are in recession.

Answer 2

One way in which the European debt crisis adversely affects the American economy is that "Some U.S. banks have indirectly lent money to heavily indebted European countries," which means that a loss of funds can lead to a loss of confidence in the US banking system.