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Economics of the EU - Class 10

Thelma Dubois 9 questions 5.0 (1 rating) Updated 24 Apr 2017

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Questions in this quiz (9)

  1. 1Amongst the following benefits of joining the EMU, which one aim at boosting trade within the union?
    1. AAlternative to fixed exchange rates
    2. BGreater transparency
    3. CLower inflation level and variability for periphery countries
    4. DReduction of transactions costs
    5. EReduction of exchange rates uncertainty
    6. FElimination of large exchange rates depreciation
  2. 2The costs of joining a common currency area...
    1. AHaving a common currency
    2. BHaving a common monetary policy
    3. CAssymetric shocks
    4. DDivergence
    5. EPrice and wage stickiness
  3. 3The costs of joining a common currency area...
    1. AHaving a common currency
    2. BHaving a common monetary policy
    3. CAssymetric shocks
    4. DDivergence
    5. EPrice and wage stickiness
  4. 4Mundell was the first economist to consider the case of asymmetric shocks in currency area in 1961.
    1. ATrue
    2. BFalse
  5. 5A country suffering a negative asymmetric shock inside a currency area cannot use its exchange rate or its monetary policy to accommodate the demand shock and the common monetary policy cannot accommodate this kind of shocks. Hence adjustment has to go through:
    1. ACapital mobility
    2. BPrice and wage flexibility
    3. CStructural reforms
    4. DLabour mobility
  6. 6After a negative demand shock, price and wage should decrease so as to make the country more competitive and thus stimulate demand.
    1. ATrue
    2. BFalse
  7. 7What is the main risk in case investors fear default in one country of the EMU?
    1. ADragging down other countries of the union
    2. BCreating a liquidity crisis
    3. CHaving inappropriate monetary policy for all members
    4. DFostering cyclical divergence
  8. 8By entering a monetary union, member countries become more vulnerable to movements of distrust by investors.
    1. ATrue
    2. BFalse
  9. 9A schematic assessment of the current EMU as an OCA, considering additional criteria presented by economists other than Mundell:
    The EMU is quite good in terms of [blank_start]economic openness/trade integration[blank_end] (McKinnon 1963) and [blank_start]diversification production/consumption[blank_end] (Kenen 1969).
    Although it is a condition to enter the EMU, it is lacking [blank_start]similarities of inflation rates[blank_end] (Fleming 1971) and requires further [blank_start]financial market integration[blank_end] (Ingram 1962) which did not work as expected.
    Finally it is hindered by a very low level of [blank_start]political integration[blank_end] (Mintz 1970) and [blank_start]compatibility in preferences[blank_end] (Tower and Willet 1976) as well as a [blank_start]non-existent fiscal integration[blank_end] (Kenen 1969).
    1. Aeconomic openness/trade integration
    2. Bdiversification production/consumption
    3. Csimilarities of inflation rates
    4. Dfinancial market integration
    5. Epolitical integration
    6. Fcompatibility in preferences
    7. Gnon-existent fiscal integration

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Description
Economics Quiz on Economics of the EU - Class 10, created by Thelma Dubois on 24/04/2017.
Language
English
Views
25
History
Created on 24 Apr 2017 · updated on 24 Apr 2017
Rating
5.0 out of 5 · 1 rating
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