The Main Function of the 1997 Stability and Growth Pact

question 34

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)make the Euro a weak currency.
• 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:

Consolidation

The process in businesses where the financial statements of several departments or subsidiaries are combined to present as those of a single entity.

Previous Business Combination

Refers to a merger or acquisition that has occurred in the past where two or more entities combined to form a single entity.

Pre-acquisition Entry

Accounting entries made to record the assets and liabilities acquired from another company before the actual acquisition.

Shares in Subsidiary

Ownership stakes held in a subsidiary company by the parent company or other shareholders.