Economic questions we are left to ponder

Letter: Perhaps this would be a suitable question for the 2009 A-Level economics paper.

"Sales strategy at Grabbit's Bank PLC over the last seven years has been to encourage mortgage customers to overstretch themselves, thereby making large profits and over-inflating the housing market.

"The Government's increase in income from Stamp Duty discourages any thought of intervention.

"In the first half of 2008 the overstretched money supply dries up and Grabbit's approaches insolvency. The Government guarantees deposits and injects tax payer's money.

"Grabbit's continues to trade but withdraws from a number financial arrangements with businesses.

"These businesses go into receivership and the staff become unemployed. Public funds are used to pay unemployment benefits.

"Many of the unemployed can no longer afford their mortgages.

"The houses that have been repossessed are sold at below their mortgaged value to wealthy speculators and others who have been paid large bonuses.

"Is Grabbit's management: a. incompetent, b. immoral, c. criminally short- sighted, d. shamefully irresponsible?

"Is the Government: a. incompetent, b. immoral, c. criminally short-sighted. d. shamefully irresponsible?

"Explain the interplay and relevance of these two recent government statements: a. "We have asked the banks to make a stay of execution of repossessions for three months." b. "2009 is going to be a bad year with increasing unemployment."

Andy Talbot

Oswestry