In the following passage there are blanks, each of which has been numbered. These
numbers are printed below the passage and against each, ve words are suggested, one of which ts
the blank appropriately. Find out the appropriate word in each case.

The continuing economic crisis has put central banks and governments the world over into ___1____ waters. For the industrialized West, the question seems to be a choice between economic stimulus and jobs, in the hope of creating a softer landing, or a swift shock at the hands of the free markets, in the hope of getting through the ___2___ more quickly. In emerging markets, the question is how to deal with being the focal point for investors looking to maximise returns.

Specifically, for the Federal Reserve in the United States, that means ___3___ hundreds of billions of dollars into the markets - buying Treasury bills to increase liquidity. In Europe the concern is that monetary union may be at risk due to the strains posed by eurozone countries that are ___3___ in ___5___. In Asia, on the other hand, economies are surging, but the prospect of hot money owing into the region could potentially spell ___6___ due to overheating.

Fears that the Fed's second round of quantitative easing may lead to a faster pace of ___7___ may be ___8___. US unemployment remains persistently high at around 10 per cent, while in ation remains astoundingly low at 1 per cent or less, the slowest on record. That's despite the Fed's earlier injection of $ 1.7 trillion into the nancial system to avert an economic depression in the wake of the global nancial crisis.

In contrast to the Fed's quantitative easing, the European Central Bank has reduced liquidity in the European banking system by some 350 billion euros during the past ve months. This reflects the central bank's ___9___ in the improved stability of the banking system and easier ___10___ to capital.