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    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 :
    A 1 and 2 only Correct Answer Incorrect Answer
    B 1 and 3 only Correct Answer Incorrect Answer
    C 2 and 3 only Correct Answer Incorrect Answer
    D 1, 2 and 3 Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Austerity describes policies used by governments to reduce budget deficits during adverse economic conditions. These┬а 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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