Austerity measures are often enacted in countries that suffer from large balance of payments deficits. Which of the following is NOT a negative consequence of austerity measures?
a. Deficit reduction
b. Decrease in government employment, thus increased unemployment
c. Decreased support for education and healthcare
d. Interest rate increases
Question 2
What was the result of the U.S. change away from a policy of dollar convertibility?
a. States are forced to closely monitor their fiscal and monetary policies to avoid balance of payment deficits andinflation.
b. Total debt levels decreased.
c. Inflation increased throughout Global North countries.
d. Currency exchanges to a system of floating exchange rates.
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