Question

Which of the following changes would represent an austerity measure?

Choose one or more:
A. a decrease in the number of public workers, to reduce government expenses
B. an increase in the number of public workers, to reduce government expenses
C. an increase in pension promises to public workers, to reduce the severity of poor economic conditions
D. a decrease in pension promises to public workers, to reduce government expenses
E. an increase in public benefits, to reduce the severity of poor economic conditions

Answer 1

A. a decrease in the number of public workers, to reduce government expenses

D. a decrease in pension promises to public workers, to reduce government expenses

Step-by-step explanation:

Austerity measures are efforts to reduce government expenditure. Governments take austerity measures to reduce budget deficits or to control public debt. Economic hardships in a country force a government to resort to cut its spending, especially if there is a possibility of defaulting in bond payments.

Austerity measures slow down economic growth as they cut government spending. Some government programs are put on hold, or their budget revised downwards. In some instances , the government may raise taxes to raise more revenue to meet its obligation. The Common austerity measures that governments take include.

1. A freeze on employment into the public sector
2. Reduction in salaries and benefits for government employees
3. Extending the retirement age
4. Raising taxes especially for the rich
5. Reduce the terms of unemployment benefits