Chap002 16 - NOT a condition of convergence: A. keep the...

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62. On January 1, 1999, an epochal event took place in the arena of international finance when A. all EU countries adopted a common currency called the euro. B. eight of 15 EU countries adopted a common currency called the euro. C. nine of 15 EU countries adopted a common currency called the euro. D. eleven of 15 EU countries adopted a common currency called the euro. 63. The advent of the euro marks the first time that sovereign countries have voluntarily given up their A. national borders to foster economic integration. B. monetary independence to foster economic integration. C. fiscal policy independence to foster economic integration. D. national debt to foster economic integration. 64. To pave the way for the European Monetary Union, the member countries of the European Monetary System agreed to achieve a convergence of their economies. Which of the following is
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Unformatted text preview: NOT a condition of convergence: A. keep the ratio of government budget deficits to GDP below 3 percent. B. keep gross public debts below 60 percent of GDP. C. achieve a high degree of price stability. D. maintain its currency at a fixed exchange rate to the ERM. 65. The European Monetary System (EMS) has the chief objective(s) A. to establish a "zone of monetary stability" in Europe. B. to coordinate exchange rate policies vis--vis the non-EMS currencies. C. to pave the way for the eventual European monetary union. D. all of the above 66. The Exchange Rate Mechanism (ERM) is A. the procedure by which ERM member countries collectively manage their exchange rates. B. based on a "parity-grid" system, which is a system of par values among ERM countries. C. a and b D. none of the above...
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