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According to the New York Times, during the pandemic,along with the sharpest economic downturn in history, the solution by most companies has been to take on more debt.


  1. Why does this borrowing binge turn conventional wisdom on its head?
  2. Does the article make it sound like there will be many defaults to the Fed on these loans or fewer near bankruptcies or a little bit of both?
  3. Why are the banks currently earning hefty fees?
  4. What has happened to bond prices?
  5. What are the zombie companies and what are they doing in the market?


Phillips, M. (2020). Businesses Are Supposed to Cut Debt in a Downturn. Why Not Now? The New York Times, July 20 (Retrievable online at )