How were the initial members of EMU chosen? How will new members be admitted? What is the structure of the complex of financial and political institutions that govern economic policy in the euro zone?
What will be an ideal response?
EU countries should satisfy:
(1 ) Low inflation rate (no more than 1.5 percent above the average of the three EU member states with the lowest inflation).
(2 ) A stable exchange rate within the ERM.
(3 ) Public-sector deficit no higher than 3 percent of its GDP in general.
(4 ) A public debt below or approaching a reference level of 60 percent of its GDP.
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The following changes in a consumer's economic circumstances result in a steeper budget line with the vertical intercept unchanged. (Denote the good on the horizontal as good 1 and the good on the vertical as good 2.)
A. A k percent decrease in the price of good 2 combined with a k percent decrease in income B. A k percent increase in the price of good 2 combined with a k percent decrease in income C. A k percent decrease in the price of good 2 combined with a k percent increase in income D. A k percent increase in the price of good 2 combined with a k percent increase in income. E. None of the above
Nancy's utility of wealth curve is given in the above figure. She is faced with a risky proposition which yields an income of $50 one-third of the time, $100 one-third of the time, and $150 one-third of the time. Her expected utility is
A) 100. B) 140. C) 150. D) 420.
Werner & Sons is a manufacturer of three-ring binders operating in a perfectly competitive industry. Table 12-5 shows the firm's cost schedule
Table 12-5 Quantity (cases) Variable Cost Total Cost Marginal Cost Average Variable Cost Average Total Cost 0 $0 $76 1 30 106 2 50 3 134 4 140 5 160 6 114 7 150 8 190 9 316 Use the table to answer the following questions. a. Complete Table 12-5 by filling in the blank cells. b. Werner is selling in a perfectly competitive market at a price of $40. What is the profit maximizing or loss-minimizing output? c. Calculate the firm's profit or loss. d. Should the firm continue to produce in the short run? Explain. e. If the firm's fixed costs were $30 higher what would be the profit-maximizing output level in the short run? Indicate whether the output level will increase, decrease, or remain unchanged compared to your answer in b. f. Suppose fixed cost remains at $76. If the price of three-ring binders falls to $20 what is the profit-maximizing or loss-minimizing output? g. Calculate the profit or loss. Should the firm continue to produce in the short run? Explain your answer. h. Suppose the fixed cost remains at $76. What price corresponds to the shut-down point? i. Suppose the fixed cost remains at $76. What price corresponds to the break-even point?
Disneyland price discriminates because
A) everyone loves going to The Happiest Place on Earth, so they'll pay whatever Disneyland wants to charge. B) children are cheaper to service, so Disneyland can charge lower prices for a children's ticket. C) only a certain number of people can get into Disneyland at any given time, limiting supply, and the market demand curve is nearly completely inelastic. D) local residents likely wouldn't go to the park at prices Disneyland can charge for tourists, which would reduce Disneyland's profits.