Question
Which of the following are correct in regard to the
austerity measures taken by a country going through adverse economy conditions: (1) These measures include a reduction in spending. (2) These measures include an increase in tax (3) These measures include reduction in budget deficit. Select the correct answer using the codes given below :Solution
Austerity describes policies used by governments to reduce budget deficits during adverse economic conditions. These policies may include spending cuts, tax increases. This is done in economic crisis situation to improve the credit rating of the countries going through adverse economic condition.
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