The Organisation for Economic Co-operation and Development (OECD) summary forecast for Greece reads 'The economy is suffering a serious recession in the context of the sizeable, but vital, ﬁscal retrenchment.' This means that:
A) the Greek government needs to reduce its spending or increase its taxes for the economy to recover.
B) the Greek economy is recovering through increases in the demand for exports.
C) the level of household consumption as a percentage of total expenditure in Greece is likely to be high.
D) new job formation and employment in Greece is likely to be high.

Question

Quizplus · Accepted Answer

The phrase "fiscal retrenchment" refers to measures taken to reduce government deficits, which can include cutting government spending or increasing taxes. The summary indicates that Greece is experiencing a severe recession, and these fiscal measures are deemed necessary but are contributing to the economic difficulties.

The Organisation for Economic Co-Operation and Development (OECD) Summary Forecast