Which one of these statements is correct?
A) Germany has the ability to print euros to pay off its national debt if need be.
B) Italian bonds were less expensive to insure than German bonds during the period 2007-2013.
C) Many investors were compensated by insurance when Greece defaulted on its bonds in 2012.
D)It was impossible to insure Irish bonds during the period 2007-2013.

Question

Quizplus · Accepted Answer

Germany, as part of the Eurozone, does not have the ability to independently print euros; this power lies with the European Central Bank. Italian bonds were generally considered riskier and thus more expensive to insure than German bonds during 2007-2013. It was possible to insure Irish bonds during that period. When Greece defaulted on its bonds in 2012, many investors indeed received compensation through credit default swaps, a form of insurance against default.

Which One of These Statements Is Correct