Chapter 20 Multiple choice questions

When did economic and monetary union become an objective of the EC?

1957

1969

1985

1992

What is meant by an 'economist' approach to monetary union?

Monetary union should only be attempted with a strict approach to monetary policy

Monetary union can be compatible with a wide range of fiscal policies

Monetary union should only be attempted after some convergence of economic policies is achieved

Monetary union should occur before convergence of economic policies

Why did the ' snake in the tunnel' not lead to monetary union after 1973?

Structural divergence in European economies

Pressure from a low US dollar

Currency speculation

All of the above

What did the Delors report propose?

An end to exchange rate targets until member state economies had converged

Maintaining the EMS with wider bands of exchange rate fluctuation

Increasing convergence in economic policy, creation of the European Central Bank and the introduction of a single currency

None of the above

How did the French and German positions on monetary union differ?

Germany wanted a highly independent European Central Bank and strong monetary discipline

Germany wanted the European Central Bank to coordinate closely with national finance ministers

France preferred the name 'euro' for the new currency, while Germany preferred 'ecu'

France favoured a rigid application of the budget deficit limits

Which four member states did not participate in the euro when it was launched in 1999?

Britain, Denmark, Portugal, and Greece

Britain, Portugal, Sweden, and Greece

Britain, Denmark, Sweden, and Portugal

Britain, Denmark, Sweden, and Greece

Which of the following is not part of the convergence criteria?

Having no budget deficit for three years running

Maintaining a level of inflation not more than 1.5% above an agreed baseline

Maintaining interest rates not more than 2% above an agreed baseline

Maintaining exchange rates within the ERM band for two years

True or false: The 2004 enlargement committed all of the new member states to becoming members of the single currency.

False

True

Which Euro Group state was the first to receive financial assistance from the EU in an attempt to stabilize a serious national economic crisis?

Portugal

Latvia

Ireland

Greece

True or False: Post-crisis reforms in the Eurozone have tended to reflect French and debtor state preferences.

True

False

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