The effect of the harsh budget cuts required by the European countries who made emergency loans to Greece in 2011 was:
A)the speedy return of the Greek economy to full employment.
B)an inflationary gap in the Greek economy.
C)that the Greek economy fell into a liquidity trap.
D)that the Greek economy became even more depressed and was unable to repay its debts in full.

Question

Quizplus · Accepted Answer

The harsh budget cuts required by the European countries who made emergency loans to Greece in 2011 led to a further depression in the Greek economy, with rising unemployment and reduced economic activity. This made it difficult for Greece to generate the income needed to repay its debts in full, leading to ongoing debt problems and the need for further bailouts.

The Effect of the Harsh Budget Cuts Required by the European