A. permanently fixed capital movements floating exchange rates a fixed structure of interest rates
B. permanently fixed exchange rates, free capital movements, a single interest rates
C. a common currency a single central bank, common monetary policy
D. a common currency floating exchange rates common monetary policy
Related Mcqs:
- Trade creation will more likely outweigh trade diversion for Country X that forms a customs union if the level of tariffs in Country X prior to the customs union is ________ and the total number of countries forming the customs union is _________?
A. relatively high; relatively large
B. relatively high; relatively small
C. relatively low ; relatively large
D. relatively low ; relatively small - As of 2002, the ________ became the official currency union of the European Monetary System ?
A. dollar
B. mark
C. franc
D. euro - The European Monetary Union is an example of a ?
A. customs union
B. free trade area
C. reciprocal trade agreement
D. monetary union - Which of the following is a problem for monetary policy in a currency union ?
A. Money supply is more difficult to control in a currency union.
B. The inflation-unemployment trade-off is more unstable in a currency union
C. All of these answers describe problems for monetary policy in a currency union
D. The interest rate may be higher than is appropriate for economic conditions in some countries while it’s lower than is appropriate in some others monetary policy must be one size fits all - One of the transmission mechanisms of monetary policy is through consumer demand when interest rates ________ household wealth ________ and consumption _________?
A. rise; increase, increase
B. rise, falls, increase
C. rise, increase, falls
D. rise, falls, falls - A fixed exchange rate, plus perfect capital mobility ________ the scope for monetary policy ?
A. enhances
B. undermines
C. encourages
D. facilitates - When imports from a higher-cost supplier within a customs union replace imports from a lower-cost supplier outside the custom union, there exists ?
A. trade creation
B. trade diversion
C. dynamic welfare effects
D. comprehensive welfare effects - The monetary base is ________ and _________?
A. bank deposits, building society deposits
B. Currency in circulation, banks cash reserves
C. retail sight deposits building society deposits
D. retail deposits, wholesale deposits - A reduction in interest rates, causes an increases in the monetary base that results in an _________ in the availability of consumer credit and a ________ in the cost of consumer credit?
A. reduction, increase
B. reduction, reduction
C. increase, reduction
D. increase , increase - The main features of the European Monetary system are ?
A. The ECU
B. currency swap agreement between member
C. the exchange rate mechanism
D. all of the above
