1. 6. Match each concept in Column A with a definition or example in Column B.

Column A Column B

a. Debt 1. The portion of the gross government debt that is owed to individuals or groups within the country

b. Deficit 2. European rules limiting government deficits

c. Gross public debt 3. The portion of the gross federal debt that is owed to foreign individuals or groups

d. Fiscal Compact 4. A stock variable that represents the accumulation of deficits over many years

e. Internal 5. An agreement between European countries to put balanced budget rules into national law 6. A policy of deficit cutting that reduces public expenditures and/or raises taxes to balance the budget debt

f. External debt g.

Monetizing the debt h. Stability and Growth Pact 7. A flow variable that measures the excess of spending over revenue collections 8. The requirements that EU countries must satisfy as a condition for participating in the Eurozone i. Austerity j.

Convergence criteria 9. The purchase of new debt from the governments by central banks 10. Total amount owed by the government to all claimants, including foreigners, the public, and other government accounts, including the central bank