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q discuss the benefits and costs of joining a fixed-exchange areaanswer benefits generally gains from the stability of the area and reduced
q the costs and benefits for a country from joining a fixed-exchange rate area such as the ems depend on how well-integrated its economy is with
q explain the difficulties in naming the new european currencyanswer amongst the reasons maintenance the name ecu would be misleading the ecu
qhow were the initial members of emu chosen how will new members be admitted what is the structure of the complex of financial and political
qwhy did the eu countries move away from the ems toward the goal of a single shared currencyanswer1 to produce a superior degree of european
q describe the main provisions of the maastricht treaty of 1991answer it identified for a single currency by january 11999 harmonizing social
q explain how the german bundesbank gained its low-inflation reputation answer essentially germanys experience with hyperinflation in the
q explain the credibility theory of the emsanswer in this approach the other ems countries in effect imported the credibility of the german
q explain why the ems countries decided to fix their exchange rates against the german dmanswer in this manner the other ems countries in
qdiscuss the effects of the reunification of eastern and western germany in 1990 on both germany and its neighboring european countriesanswer germany
qwhat prompted the eu countries to seek closer coordination of monetary policies and greater exchange rate stability in the late 1960sanswer1to
q how did the european single currency evolveanswer the answer is related to the crumple of bretton woods and the european currency reform of
q how and why did europe set up its single currencyanswer the why part of the question is associated to large fluctuations in the exchange
q using the aa - dd framework compare the effects of a rise in real domestic money demand under flexible and under fixed exchange-rate
quse the dd - aa model to examine and compare the response of an economy under fixed and floating exchange-rate regimes to a temporary fall in
q fixed exchange rates are not even an option for most countries discuss answer durable fixed exchange rate arrangements may possibly not even
q what has been learned since 1973 with regard to the experience with floating exchange rate regimeanswer1 monetary policy autonomy yes though
q imagine a world with two large countries home and foreign evaluate how homes macroeconomic policies affect foreign compare the small and the
q even under flexible exchange rate regime governments should not be indifferent to the behavior of inevitably and exchange rates surrendered some of
qhow did countries use their policy tools to regain internal and external balance after the first oil shock of 1973answer seeing that the recession
qunder floating rates the economy is more vulnerable to shocks coming from the domestic money market discussanswer it is true statement under
q present the case against floating exchange ratesanswer1the discipline obligatory on individual countries by a fixed rate would be lost2
q present the case for floating exchange ratesanswer1 monetary policy autonomygovernments would able to use financial policy to reach
q why would you suggest to a government to use a floating exchange-rate regimeanswer floating exchange rate is an exchange rate in which
qusing an equation explain why governments prefer to avoid excessive current account surplusesanswer this pursue from the national income identity s