Question

The Council is not responsible for which of this role:

Select one:

a. Coordinate economic policies of the Members States

b. Implement EU policies

c. Approve the European budget

d. Pass European laws

The Copenhagen criteria:

Select one:

a. are the rules that define whether CEECs are eligible to join the Euro zone.

b. are the rules that define whether Central and Eastern European Countries (CEECs) are eligible to join the European Union.

c. define the main steps of the elaboration of the Constitutional Treaty.

d. define new voting rules to be implemented after the membership of CEECs in 2004.

The Purchasing Power Parity principle asserts that:

Select one:

a. the rate of appreciation of a currency follows the rate of foreign inflation.

b. nominal exchange rates are volatile while prices are much more stable

c. over the long run the nominal exchange rate, prices and wages all adjust to each other so that external equilibrium is restored.

d. there is no visible link between volatile exchange rates and money growth and inflation

If an investor observes that the nominal interest rate is Lower in USA than in Germany, he should invest in Country Germany if:

Select one:

a. he expects Germany’s exchange rate to remain constant over time.

b. he expects Germany’s exchange rate to appreciate

c. he expects USA’s exchange rate to depreciate.

d. 1 and 2 are both true.

After the great depression, once the Gold standard collapsed:

Select one:

a. Exchange rate were left to float, and each country sought to boost exports by undervaluing their exchange rate

b. Exchange rate were left to float, and each country sought to boost exports by over-valuing their exchange rate

c. None of the above

d. Exchange rate were anchored to the USA dollar, and each country sought to boost exports by over-valuing their exchange rate

The Hume’s price-specie mechanism states

Select one:

a. If a country’s prices are too high, the country is uncompetitive, its real exchange rate overvalued and runs a trade deficit

b. If a country’s prices are too high, the country is over-competitive, its real exchange rate overvalued and runs a trade surplus

c. If a country’s prices are too low, the country is uncompetitive, its real exchange rate overvalued and runs a trade surplus

d. If a country’s prices are too high, the country is uncompetitive, its real exchange rate undervalued and runs a trade deficit

I

nflations rates differ a lot among European countries, which represent a problem of competitiveness for countries that face higher inflation. A reason or some of the reasons for such a divergence is/are:

Select one or more:

a. All of the above

b. Doom Loop

c. Autonomous wage and price pressure

d. Balassa-Samuelson effect

Answer 1

The council is not responsible for implementing EU policies.

The copenhagen criteria define the main steps of the elaboration of the constitutional treaty.

The purchasing power parity principle assert that the rate of appreciation of a currency follows the rate of foreign inflation.

If an investors observes that the nominal interset rate is lower in USA than Germany he should invest in Germany if he expects Germany exchange rate to appreciate

After the great depression, once the gold standard collapsed exchange rate will left to float, and eacb country soght to boost exports by over valuing their exchange rate.

The hume's price -specie mechanism states that if a country's price are too high, the country is over competitive, its real exchange rate is over valued and runs a trade surplus.

Inflation rate differs among a lot among european countries, which represent a problem of conpetitivness of countries that face higher inflation. A reason for some of the reasons for such a divergence is all of the above