Which of the Following Is an Austerity Measure

question 24

Multiple Choice

Which of the following is an austerity measure?

• A)The United States lowered interest rates in response to the financial crisis.
• B)Brazil increased spending on health care for the poor.
• C)Mexico raised interest rates to 50 percent in 1994.
• D)Venezuela reduced the price of bus fares.
• E)Russia lowered taxes on the middle class.

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Definitions:

Binding Agreement

A contract or agreement that is legally enforceable in a court of law, implying that all parties have agreed to the terms and conditions.

Variable Interest

Interest that can change over the lifetime of a loan, credit line, or other form of financing, usually linked to a fluctuating benchmark rate.

Loss Contingencies

Potential losses that may occur in the future and are recorded in financial statements if they are probable and can be reasonably estimated.

Accrue

The process of recording expenses and revenues that have been incurred or earned, respectively, but not yet received or paid, in order to reflect the true financial position of an entity.