The markets are usually a good way to organize economic activity. In financial markets, this may mean that in some markets, the interaction between supply and demand of loanable funds results in a very high interest rate. Consider, for example, the market for loans for bail bonds. When a person is imprisoned and needs to post bail, he/she may want to borrow money to be able to post the bail.

1. Given your understanding of the market for loanable funds, do you expect the supply of funds available for loan for bail bonds to be high or low?
2. Because of #1, do you expect the prevailing interest rate in the bail loan market to be high or low?
3. What does your answer to #2 mean for the people needing bail loans? Is this a moral outcome, in your view? Why or why not?
4. What government policy could be proposed in light of your answer to #3? Would such a proposed solution produce a more moral outcome or a less moral outcome, in your view? Why?