ECU (European Currency Unit) was

unit of account used for central banks' transactions in EU

The main reason behind the idea of monetary integration in the 1960s in the EU was

success in trade integration (inta-EU trade)

Further criteria for optimum currency area are

trade integration and similar produc tion structure

marked the necessity to give up monetary sovereignity

'Snake in the Tunnel' is a synonym for

mutually pegged fluctuations of EU currencies vis-á-vis USD

Werner Plan (1969) failed because of

poor economic policy coordination among member states

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Economic and Monetary Union

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A History of Monetary Integration in Europe

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Questions 10

Answers

1
Before creating a monetary union it was necessary to
improve economic policy coordination
all the above
increase economic and socila cohesion
finalize the Sinle Market Project
2
Acronym ERM stands for
Enterprise Risk Managment
Electronic Retrograde Managment
Environmental Resource Management
Exchange Rate Mechanism
3
Optimum Currency Area Theory requires following adjustment mechanisms for a sustainable mon.un.
all the above
wage flexibility
labour force mobility
capital mobility
4
ECU (European Currency Unit) was
'transition money' towards the euro
unit of account used for central banks' transactions in EU
paper money issued by Bundesbank used for intra-EU payments
unit of account used to achieve external balance (BoP)
5
The main reason behind the idea of monetary integration in the 1960s in the EU was
success in trade integration (inta-EU trade)
first signs of pending oil crises
globally stabile exchange rates
slow economic growth in the EU
6
Further criteria for optimum currency area are
trade integration and similar produc tion structure
central bank
political integration
similarity in production factor prices
7
Delors Report (1989)
set up the name of the new currency - euro
stressed importance of gradualism in creating monetary union
identified all the steps towards monetary integration
marked the necessity to give up monetary sovereignity
8
'Snake in the Tunnel' is a synonym for
high volatility of USD on international markets
the failure of the Werner Plan
mutually pegged fluctuations of EU currencies vis-á-vis USD
uncontroled fuctuations of some European currencies
9
Werner Plan (1969) failed because of
lack of support in the European Parliament
speculative attacks on some European currencies
the problems in the Bretton-Woods monetary system
poor economic policy coordination among member states
10
Name two mutually competing ideas on how to create a monetary union
historical and evolutionary approach
micro- and macroeconomic approach
monetary and economic approach
political and economic approach

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