Question

Which of the following is NOT a way in which expansion of the EU complicates EMU?

A.

Coordination of 25 exchange rates is more difficult than 15.

B.

Complicates voting procedures for the ECSB.

C.

Increases the likelihood of asymmetric shocks within the eurozone.

D.

All three complicate EMU.

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What is the main purpose of Stability and Growth Pact (SGP)?

A.

To centralize fiscal policy.

B.

To prevent inflationary pressure on ESCB.

C.

To establish equal rates of economic growth in the Euro-zone.

D.

To prevent beggar-thy-neighbor policies.

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Movements in the euro's external exchange rate can be seen as goods-market shocks that have asymmetric effects on different effects on different euro zone members. When the euro appreciated against China's currency in 2004, which country suffered the greater fall in aggregate demand, Germany, which does not compete directly with China in its export markets, or Greece, which does?

A.

Germany

B.

Greece

C.

Both equally

D.

Uncertain

Answer 1

1.) To answer the question number 1 you need to learn about EMU

So let me explain you about EMU

EMU stands for Economic and Monetary Union. It means coordinating all economic and fiscal policies and also monetary polices and this leads to put a common currency and that is EURO.

And now coming to question all the options complicate EMU over expansion of EU. This is based on EMU means.

So the answer is "D".

2.) To answer this question let me expalin you the purposes of SGP stability and growth pact.

SGP means an agreement between members of EU european union.

This is used to safegaurd the economic and monetary policies of EU.

It is used to set fiscal rules over EU members to maintain their spending beyond means.

NOW , From these above factors we can opt A and C options as the answers.

So the answer is "A or C".

3.) To this question the answer is "C" both countries equally effected.

Hope you understand my explanation, Thank you for your support.