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Assess The Effects Of Economic Instability On Social Political And Environmental Factors

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Assess the effects of economic instability on social, political and/or environmental factors as well as some of the solutions that have been employed to overcome them.

Today’s most urgent problem is the global financial crisis, which broke out in 2008, its impact and its negative consequences( Karimov, 2009). Economic instability as a definition is when the financial system of a country faces ups and downs on its economic objectives. That is, when it faces major fluctuations in output, when inflation is high, employment is low, or when there is unsustainable growth. It could also be described as when the economic objectives of a country are not at the level where they should be. Cyprus is a recent example of a country that experienced and still suffers from economic instability and the effects of economic instability can be explained giving examples from this case study.

Cyprus experienced a wealthy period (since its independence), through the years leading up to the financial crisis; it was fuelled by a booming construction industry and established itself as a regional financial centre (Theocharides, 2013). More particularly, the country had the lowest corporate tax (in Europe) and provided a tax service at a point where consumers were able to pay. Not only this, but it also had a stable banking system and high levels of education throughout the country. The banking system had high local deposit rates, a flood of foreign money and a large number of registered foreign

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