Wednesday, February 8, 2012

Leta's Questions

What were the advantages to the euro?
What is inflation? Why is it significant to a country?
Does unification equal security?
What is "retail banking"?
Where did Greece's extra money come from?
Why did Greece look like a safe bet for PIMCO?
Why does PIMCO lend money to governments?
What is a deficit? Why is it significant?

1 comment:

  1. euro advantages: connect europe together, avoid wars?, more power, poor countries would have a stronger currency and rich countries would have more customers

    inflation is when government creates more currency which makes money less valuable and products more expensive

    the idea about unification is that when a few countries are doing well, everyone else is doing well... however the converse of this is true as we have seen

    "retail banking" is the ability to shop for banking (rates, lending, borrowing etc.)

    PIMCO loaned Greece the money

    Greece looked like a safe bet for PIMCO because Greece's deficit was said to be about 6% (however this was false, the deficit was actually about 15%)

    PIMCO is a global investment company that makes money off of loaning money to governments with interest rates

    a deficit is the difference between the amount of money a country has and the amount of money it has spent, basically it's how too small the amount of money a country has is, (the lower the deficit the better)