Two of the "Convergence Criteria" Pertaining to Initial Membership in the EMU

question 18

Multiple Choice

Two of the "convergence criteria" pertaining to initial membership in the EMU were that a country's ratio of government debt to GDP must be __________ and that a country's ratio of government budget deficit to GDP must __________.

• A) 60 percent or less; 3 percent or less
• B) 60 percent or less; 60 percent or less
• C) 3 percent or less; also be 3 percent or less
• D) 3 percent or less; 60 percent or less

---

Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations using its current assets.

Pension Plans

Financial programs set up to provide income to individuals during retirement, usually funded by employers or the government.

Low-Dividend Policy

A strategy adopted by companies to retain more earnings by distributing lower dividends to shareholders, typically to reinvest in the company's growth.

Corporate Investors

Organizations that invest in other companies’ securities, often for strategic purposes beyond mere financial gain.