Chapter 15

Question 1

interest

Answer 1

the amount that must be paid by the borrower in addition to the principal and that provides the lenders profit and security against risk

Question 2

principal

Answer 2

the amount of money initially borrowed

Question 3

usury

Answer 3

excessive interest rates

Question 4

loan pushing

Answer 4

banks or lending agencies encouraging borrowers to take loans they do not need or cannot afford to repay

Question 5

structural adjustment

Answer 5

controversial series of economic and social reforms promoted by the imf and world bank to promote economic development through minimizing the role of the state in societies and liberalizing markets

Question 6

real interest rates

Answer 6

rate of interest charged, less than the rate of inflation

Question 7

heavily indebted poor countries initiative

Answer 7

1996 arrangement between Bretton Woods institutions and government donors to cancel some of the debts of the poorest countries if they implement structural adjustment programs

Question 8

odious debt

Answer 8

loan to a dictatorship that does not benefit the people and may be used to repress the population that fights the regime

Question 9

illegitimate debt

Answer 9

a loan that should not have been made and thus reflects misconduct by the lender, responsibility of the lender not the borrower

Question 10

quantitative easing

Answer 10

gradual increase in the money supply based on a a central banks purchase of financial assets from private banks