Which of the Following Was Part of the Stability and Growth

question 52

Multiple Choice

Which of the following was part of the stability and growth pact that was required for countries to be part of the European Monetary Union?

• A)The annual government budget must be no greater than 3% of GDP.
• B)The annual inflation rate must remain within 1.5% of the three best-performing EU countries.
• C)The annual government budget deficit could be no greater than 60% of GDP.
• D)The annual inflation rate must remain within 5.5% of the four best-performing EU countries.

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Definitions:

Inflation

The speed at which the overall price level of goods and services increases, leading to a decline in the currency's buying power.

Relative Prices

The price of one good or service compared to another, often used to analyze choices and preferences in consumer behavior.

Society

A community of individuals living together in a more or less ordered community, sharing customs, laws, and organizations.

Money Demand

The desired holding of financial assets in the form of money; it is often associated with the level of liquidity preference.