Why did the EU countries move away from the EMS toward the goal of a single shared currency?
What will be an ideal response?
(1 ) To produce a greater degree of European market integration by removing the threat of EMS currency realignments.
(2 ) Reduce German dominance of the EMS monetary policy.
(3 ) Given the move to complete freedom of capital movements within the EU, fixed but adjustable currency parities, may lead to ferociously speculative attacks, as in 1992-1993.
(4 ) To guarantee the political stability of Europe.
You might also like to view...
Everything else held constant, changes in the interest rate affect planned investment spending and hence the equilibrium level of output, but this change in investment spending
A) merely causes a movement along the IS curve and not a shift. B) is crowded out by higher taxes. C) is crowded out by higher government spending. D) is crowded out by lower consumer expenditures.
In a partnership, debts accumulated by one partner
A) are the responsibility of that partner only. B) are the responsibility of the other partners as well. C) are the responsibility of all the employees of the partnership, regardless of whether those employees are partners. D) are the responsibility of the other partners only up to the amount each partner initially invested in the partnership.
For a given set of prices, two consumers choose bundles that are off the contract curve. In a competitive market,
A) prices will adjust until the consumers choose bundles that are on the contract curve. B) the indifference curves will shift back to the contract curve. C) the contract curve will shift to connect these bundles. D) no adjustments need to be made.
The lags of monetary and fiscal policy imply that government stabilization policy is likely to be optimal.
Answer the following statement true (T) or false (F)