The Convergence Criteria for Joining the EMU Include All the Following

question 46

Multiple Choice

The convergence criteria for joining the EMU include all the following except

• A)inflation at a given low rate.
• B)the long-term interest rate at a given low rate.
• C)a budget deficit not exceeding 3 percent of GDP.
• D)government debt not exceeding 60 percent of GDP.
• E)an annual growth rate of real GDP per capita higher than 5 percent.

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Definitions:

Marginal Cost

The incremental cost of fabricating one more unit of a product or service.

Profit-maximizing Quantity

The point of production where a company reaches its maximum profit, occurring when marginal revenue is equal to marginal cost.

Profit-maximizing Price

The price at which a firm can achieve the highest possible profit.

Total Cost

Refers to the complete cost of production that includes both fixed and variable costs.