The Main Function of the 1997 Stability and Growth Pact

question 84

Multiple Choice

The main function of the 1997 Stability and Growth Pact (SGP) was to

• A) exclude a highly indebted EMU country
• B) enhance cooperation between France and Germany.
• C) tighten the fiscal constraints.
• D) distribute the Euro banknote among European central banks and to create a timetable for the imposition of financial penalties on countries that fail to correct situations of "excessive" deficits and debt promptly enough.
• E) determine specialized penalties for each member nation.

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Definitions:

Coefficient

A fixed number or constant that is positioned in front of and multiplies the variable within an algebraic term.

Correlation

A metric that describes how closely two or more variables' movements are related.

Linear Correlation

A correlation that is best expressed visually as a straight line.

Direct Correlation

A relationship where an increase in one variable is associated with an increase in another, indicating a positive linear relationship.