Exam 15: Flexible Versus Fixed Exchange Rates,european Monetary Systems,and Macroeconomic Policy Coordination

In order to attain the goal of a monetary union,the president of the European Commission recommended a stage based transition.Which stage of this transition involved the completion of the monetary union with the establishment of a single currency and a European Central Bank.

At the beginning of 1999,the European Monetary System became the _________________ with the introduction of the euro and the adoption of a common monetary policy by the European Central Bank.

What country was admitted to the EMU on January 1,2001?

Under a flexible exchange rate system_____________ would be changed in order to correct a disequilibrium in the nation's balance of payments.

The institution of the European Monetary System that provides short-term and medium-term balance-of-payments assistance to member nations is known as:

Under a ____________,a nation is free to utilize all polices at its disposal to achieve its goal of full employment with price stability without having to worry about external balance.

Under the ________________,the creation of the European Monetary Institute was created as a forerunner of the European Central Bank and monetary union.

Which of the following is one of the conditions that was set under the Maastricht Treaty and must be met before a nation could join the European Monetary Union?

In 1998,the _______________ was established as a federal structure of the national central banks of the European Union.

The second stage of the monetary union,approved at a meeting in Maastricht in December 1991,called for the creation of the________________.

A fixed exchange rate system is alleged to:

Advocates of fixed exchange rates claim that flexible exchange rates:

An optimum currency area has all of the following except:

The case against fixed exchange rates is:

Optimum currency areas provide each member with the ability to pursue its own independent stabilization.

The organization formed by the members of the European Union in 1979 based on the creation of the European currency unit of account,limited exchange rate flexibility among members,and formation of the European Monetary Fund is known as the:

A monetary union in Europe would mean that member nations would relinquish their sovereign power over their money supply and monetary policy.

The system under which the exchange rate is always determined by the forces of demand and supply without any government intervention in foreign exchange markets is a(n):

The modification of national economic policies in recognition of international interdependence is known as:

The exchange rate arrangement whereby the nation fixes the exchange rate and allows the nation's money supply to increase or decrease only in response to balance-of-payments surpluses or deficit is known as (a):