Question 1

What is an optimal currency area? Does the EU fulfil the criteria?

Accepted Answer

An optimal currency area would have the ...

Question 2

If countries attempt to achieve similar rates of economic growth through demand management policy, for which of the following reasons may the equilibrium rate of exchange change over the longer term?
 (i)  The marginal propensity to import differs from one country to another.
(ii)  The relative income elasticities of demand for imports and exports differ from one country to another.
(iii)  The rate of growth of productivity differs from one country to another.

Accepted Answer

A)   (i)  and (iii) 
B)   (ii)  and (iii) 
C)   (i) , (ii)  and (iii) 
D)   (ii) 
E)   (i)  and (ii) F) B) and E)
G) C) and E)

Question 3

The UK was a member of the European Exchange Rate Mechanism (ERM)  from  ___to ___  .

Accepted Answer

A)   1979; 1997
B)   1990; 1992
C)   1990; 1997
D)   1979; 1992E) A) and B)
F) A) and C)

Question 4

The Maastricht Treaty of 1992 set out a programme for the European Monetary Union (EMU) . In order to take part in the proposed single currency, countries had to fulfil five 'convergence criteria'. Which of the following was not one of the criteria?

Accepted Answer

A)   Budget deficit not more than 3% of GDP
B)   Unemployment not more than 2% more than the average of the three lowest countries
C)   National debt not more than 60% of GDP
D)   Exchange rate within the ERM bands for at least two yearsE) All of the above
F) A) and B)

Question 5

The most likely result of the US raising interest rates is that it would ___its trade deficit and interest rates in other countries would  ___	.

Accepted Answer

A)   increase; rise
B)   increase; stay the same
C)   decrease; rise
D)   decrease; stay the sameE) A) and C)
F) All of the above

Question 6

Why did the UK leave the European Exchange Rate Mechanism (ERM)  in 1992?

Accepted Answer

A)   There was massive speculation against the pound.
B)   The ERM was changed after the Maastricht Treaty.
C)   Public opinion in the UK had become much more Eurosceptic.
D)   Mrs Thatcher took account of a rising tide of Euroscepticism in her party.E) B) and C)
F) A) and B)

Question 7

When countries achieve similar levels of growth, inflation and budget deficits, this is called

Accepted Answer

A)   convergence.
B)   international harmonisation of economic policies.
C)   globalisation.
D)   monetary convergence.E) A) and C)
F) None of the above

Exam 32: International Economic Policy

Why did the UK leave the European Exchange Rate Mechanism (ERM) in 1992?

Correct Answer
verified

What is an optimal currency area? Does the EU fulfil the criteria?

Correct Answer
verified
An optimal currency area would have the ...
View Answer

The most likely result of the US raising interest rates is that it would _its trade deficit and interest rates in other countries would _ .

Correct Answer
verified

The UK was a member of the European Exchange Rate Mechanism (ERM) from _to _ .

Correct Answer
verified

Correct Answer
verified

The Maastricht Treaty of 1992 set out a programme for the European Monetary Union (EMU) . In order to take part in the proposed single currency, countries had to fulfil five 'convergence criteria'. Which of the following was not one of the criteria?

Correct Answer
verified

When countries achieve similar levels of growth, inflation and budget deficits, this is called

Correct Answer
verified

Exam 32: International Economic Policy

Why did the UK leave the European Exchange Rate Mechanism (ERM) in 1992?

Correct AnswerverifiedShow Answer

What is an optimal currency area? Does the EU fulfil the criteria?

Correct AnswerverifiedAn optimal currency area would have the ...View AnswerShow Answer

The most likely result of the US raising interest rates is that it would ___its trade deficit and interest rates in other countries would ___ .

Correct AnswerverifiedShow Answer

The UK was a member of the European Exchange Rate Mechanism (ERM) from ___to ___ .

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Maastricht Treaty of 1992 set out a programme for the European Monetary Union (EMU) . In order to take part in the proposed single currency, countries had to fulfil five 'convergence criteria'. Which of the following was not one of the criteria?

Correct AnswerverifiedShow Answer

When countries achieve similar levels of growth, inflation and budget deficits, this is called

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
An optimal currency area would have the ...
View Answer

The most likely result of the US raising interest rates is that it would _its trade deficit and interest rates in other countries would _ .

Correct Answer
verified

The UK was a member of the European Exchange Rate Mechanism (ERM) from _to _ .

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified