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debtocracy bus 189 quiz

debtocracy bus 189 quiz - Basically it means that the...

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BUS 189 11/29/11 BUS 189 Quiz #8 “Debtocracy” 1. What are the reasons for the Greek financial crisis? One of the reasons for Greek’s financial crisis was when the European Union converted to a single currency, the Euro. This made it more difficult for smaller and poorer European countries like Greece to compete against richer countries like Germany. This affected trading for Greece and soon grew a trade deficit. Then the government irresponsibly borrowed money, which involved a shady deal with Siemens. Some of the Greeks leaders made decisions on these loans for their own personal financial and political gain. 2. What is odious debt? The “odious debt” concept is a possible solution to help solve Greece’s debt problems.
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Unformatted text preview: Basically, it means that the country should not take full responsibility of a debt incurred by the government if the government borrowed money without the knowledge and approval of the people, nor if it was in their interests. If the lenders knew what was going on, they cannot expect the people to take on the debts of the government if the loans did not benefit the interests of the people. 3. What is the agency problem in this video? In this video, the government is the agent and the public or people represent the principal. Some of the banks and Greece leaders used to loans for their own financial gains. Some of these transactions were done without the knowledge or approval of the public, nor in their interests....
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