1. 5. Match each concept in Column A with a definition or example in Column B.

Column A Column B

a. International Monetary Fund 1. ECB program to buy government bonds

b. European stability mechanism 2. Difference between yield on a specific bond and yield on a high-quality bond

c. Bond spread 3. Prohibition in EU treaties to assume other countries’

liabilities

d. Outright monetary transaction 4. European fund giving emergency loans to euro-countries

e. Austerity 5. International organization providing emergency loans to countries

f. No-bailout clause 6. Cuts in expenditure and increases in taxation g. Denmark 7. Research asking under which circumstances forming a monetary union is beneficial h. Optimum 8. Bonds jointly guaranteed by euro-area members currency area theory i. Euro bonds 9. Changing the debt burden by reducing the principal, reducing interest rate payments, or increasing maturity j. Debt restructuring 10. An EU country not having joined the euro