Answer to Question #256289 in Macroeconomics for Hansi

Question

"As investors in the Greek bond market lost confidence in Greek bonds, the interest rates in Greece began to rise sharply above the European average interest rate". Explain why.

Answer 1

The Greek economy has become the first victim of a sovereign debt crisis that threatens to destabilize the euro zone and jeopardize Europe's fragile recovery.

putting the recovery from the Great Recession of 2009 at jeopardy.