Macroeconomics: UK economy, IB Economics

Phillip Inman writes in the Observer about the possibility of a future debt crisis, with small firms having borrowed large amounts to stay afloat during the pandemic and subsequently being unable to repay their loans.

He looks at solutions to this, siding with Sir Jim O'Neill in suggesting that there's a need for large-scale government intervention to prop up viable firms, but this, of course, raises the spectre of cherry-picking, and decisions made on political rather than economic grounds. 

Is this an appropriate form of government intervention, and how would you go about testing this hypothesis? Either way, the UK government has spent an lot on British Steel and an extra £00m rescue package begs the question as to whether or not it is worth it.

There are lots of issues to look at - opportunity cost, the sunk cost fallacy , the multiplier effectand the notion of cherry-picking for a start. Lots of first principles that would make this an interesting introductory teaser to set a Year 12 group new to the subject.