QUESTION Which of the following countries has adopted the euro as its currency? A. Great Britain B. France C. Denmark D. Sweden E. Switzerland ANSWER B
Date: September 3rd, 2020
QUESTION Establishment of the euro required participating national governments to: A. have a sound fiscal situation. B. have stable exchange rates. C. be democratic in nature. D. give up control over monetary policy. E. have a high degree of price stability. ANSWER D
Date: September 3rd, 2020
QUESTION A benefit of adopting the euro as a common currency is that it: A. makes it easier to compare prices across Europe. B. makes Europe an optimal currency area. C. increases the range of investment options open only to institutions. D. leads to higher prices, which translate into substantial gains for European producers. E. […]
Date: September 3rd, 2020
QUESTION Over time the euro will impact the pan-European capital market by leading to: A. an increase in the cost of capital. B. a decline in the overall level of savings and investment. C. an increased efficiency with which investment funds are allocated. D. reduced liquidity in the market. E. reduced competition among European producers. […]
Date: September 3rd, 2020
QUESTION A key advantage of adopting the euro is that it: A. helps in reduction of competition in Europe. B. has prevented the development of a highly liquid pan-European capital market. C. lowers foreign exchange and hedging costs in Europe. D. insulates Europe from international competition. E. increases the range of investment options open to […]
Date: September 3rd, 2020
QUESTION Which of the following is a drawback of adopting the euro? A. Loss of control over national monetary policy B. Increase in the cost of capital C. Reduction in the liquidity of capital markets D. Reduction of price differentials within the euro zone E. Loss of investment options open to both individuals and institutions […]
Date: September 3rd, 2020
QUESTION Which of the following is true of the euro since its establishment in 1999? A. The value of the euro has been stable against the U.S. dollar. B. The euro’s value has steadily appreciated against the U.S. dollar. C. The euro’s value initially appreciated and then steadily depreciated against the U.S. dollar. D. The […]
Date: September 3rd, 2020
QUESTION Which of the following is a reason for Great Britain, Denmark, and Sweden to stay out of the euro zone? A. The dollar peg advocated by some members of the European Union B. The implied loss of national sovereignty to the European Central Bank C. The volatility of the euro D. The reluctance to […]
Date: September 3rd, 2020
QUESTION Similarities in the underlying structure of economic activity make it feasible to adopt a single currency and use a single exchange rate as an instrument of macroeconomic policy in a(n): A. managed currency zone. B. open exchange regime. C. optimal currency area. D. free trade area. E. advanced monetary zone. ANSWER C
Date: September 3rd, 2020
QUESTION Suppose the country of Ceria and Lithinia imposed tariffs on imports from all countries, and then they set up a free trade area, scrapping all trade barriers between themselves but maintaining tariffs on imports from the rest of the world. Now, Ceria begins to import sugar from Lithinia. However, Ceria had previously been importing […]
Date: September 3rd, 2020
