1. If I can buy a car today for $5,000 and it is worth $10,000 in extra income next year to me because it enables me to get a job as a traveling anvil seller should I take out a loan from Larry the loan shark at a 90% interest rate if no one else will give me a loan? Will I be better or worse off as a result of tak- ing out this loan? Can you make a case for legalizing loan-sharking?
2. Some economists suspect that one of the reasons that economies in developing countries grow so slowly is that they do not have well-developed financial mar- kets. Does this argument make sense?
3. The U.S. economy borrowed heavily from the British in the nineteenth century to build a railroad system. What was the principal debt instrument used? Why did this make both countries better of?
4. "Because corporations do not actually raise any funds in secondary markets, they are less important to the economy than primary markets." Comment.