QUIZ CHAPTER 21

Which EU body is directly elected by the citizens?

• European Commission

• European Parliament

• Court of Justice

• Council of the European Union

What was the purpose of the European Monetary System (EMS) when it was first implemented in 1979?

• The EMS was established to regulate interest rates for all European Union member states

• The EMS was designed to replace all national currencies in Europe immediately with a single currency

• The EMS was created to establish a system of fixed exchange rates among European countries through the exchange rate mechanism (ERM)

• The EMS aimed to create a free trade agreement among European countries for agricultural products

Which of the following is NOT a requirement for a country to become a member of the EU?

• Having low barriers that limit trade and flows of financial assets

• Adopting common rules for emigration and immigration to ease movement

• Establishing common workplace safety and consumer protection rules

• Establishing a state-controlled economy with no private enterprises.

How many countries were members of the Eurozone as of January 1, 2021?

• 17

• 20

• 19

• 18

What could happen if an EU country abandoned the euro or restricted free trade?

• Economic instability and weakened EU unity

• No impact since each country operates independently

• Immediate expulsion from the EU

• Strengthens the EU by increasing economic diversity

Under the EMS, Germany set the system's………?

• Monetary policy while the other European countries pegged their currencies to the DM.

• Fiscal policy while the other European countries pegged their currencies to the DM.

• Monetary policy while the other European countries kept their currencies fluctuating relative to the DM.

• Fiscal policy while the other European countries kept their currencies fluctuating relative to the DM.

During the EMS (1979–1998), countries such as Portugal, Spain, the United Kingdom (until 1992), and Italy (until 1990) were allowed to have wider exchange rate fluctuation ranges for what purpose?

• To ensure inflation stability

• To increase monetary policy flexibility

• To maintain a fixed exchange rate

• To synchronize fiscal policy with Germany

During the early stages of EMS, what measures were taken to restrict foreign exchange transactions and prevent speculation?

• Imposing foreign exchange controls

• Raising import and export duties

• Imposing capital controls

• Providing subsidies to banks

Under the 2019 Brexit withdrawal agreement, what is the purpose of the 11-month transition period?

• Allow the UK to immediately apply EU regulations

• Negotiate long-term trade deals while maintaining unimpeded trade

• Devalue the pound

• Introduce new exchange controls

What was the purpose of the 1993 redefinition of the EMS?

• Permanent fixing of the exchange rate

  
  

• Allowing exchange rate bands to devalue the currency against the deutschemark

  
  

• Immediate adoption of the euro

  
  

• Increased speculation in the foreign exchange market