EuroZone Debt Crisis

hey read the following link it might be useful as it is written by our professor Dear John.
https://opentuition.com/groups/ask-the-tutor-acca-p4-exams/forum/topic/effects-of-change-in-recovery-strategy-from-austerity-to-growth/

Thank you Saline :)
(Also, read the article in Student Accountant from earlier this year.)

He will not expect you to come up with a solution (!) but he can expect you to discuss possible solutions.

Thank you for your help also sorry for the repost. I tried to delete it but i dont know how :(

No problem.

Actually I am glad you did because I was going to add something!

What he might do is give you a quote from someone else and ask you to comment on it. For example, he might say that someone has said the Greece should leave the Eurozone, and ask you to comment. You must not say that you agree or disagree, but give the reasons why it might be good and why it might be bad.

That would be a way of checking you understood his article rather than just expecting you to repeat it.

Sir, pls explain the relationship between austerity, devaluation and stagnation.
Thank you.

Sir, kindly explain the relationship between liquidity risk and solvency risk.
Thank you.

Which is better in resolving finacial crisis, monetary policy or fiscal policy, and why?

Any difference bewteen financial crisis and debt crisis, pls?

Thank you.

What does "“kicking the can down the road", pls?
Thank you.

Austerity, devaluation and stagnation are separate things - there is no direct relationship.
However austerity can lead to stagnation because it curtails growth.
Devaluation can be used as a way of trying to avoid austerity, but it dangerous.

Liquidity risk is the risk of not being able to pay expenses.
Solvency risk is the risk of not being able to repay borrowings.
There is no direct relationship.

There is no 'best' way of resolving the financial crisis -different people have different opinions. If there was a 'best' way then it would be solved by now :)
(And the examiner can never ask you the best way - he can just ask you to discuss the ways.)

Why on earth are you asking me what 'kicking the can down the road' means?!!!

It is slang (so do not use the expression in the exam) but it means delay making a decision in the hope that the problem will go away.

Thank you so much for your kind help!

You are welcome :)

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