1. 4. The chapter identifies and explains several reasons government deficits in the euro area have repeatedly been above the threshold of 3 percent of GDP. Which of these explanations is consistent with the chapter’s presentation?

a. Interest rates for countries having joined the euro were much higher than prior to euro-area membership.

b. Unexpected recessions have led to lower government revenues and hence have pushed deficits up.

c. Politicians never cut back deficits.

d. Interest payments on the debt have risen.

e. Many governments did not bring down their deficits sufficiently in good times.