Why is the EMU malfunctioning? -mark the correct answer. Because not all the EU

Question

Why is the EMU malfunctioning? -mark the correct answer.

Because not all the EU members are participating

Because the British did not join the EMU

Because the Euro lost the value against the dollar in the recent months

Because it is not the optimal currency area with common budget and monetary policy

Why it is so difficult to have a common fiscal policy in the Eurozone and the EU? -mark the correct answer.

This is constitutional issue not economic or political

This is a fundamental issue of the supranational powers of the EU over the national policies

This is an issue of the lack of common currency among all EU members

This issue is currently being resolved by the EU Parliament

3.5 points   

Why the EU was created? -mark the incorrect answer.

The EU was created because the West was engaged in Cold War and Europe had to be fast rebuild

Germany wanted to be unified and only unified Europe would allow that to happen

The Europeans wanted to merge the markets to help their growth

The Europeans wanted to confront the power of the USA after the WWII

3.5 points   

Why the reforms proposed by Mikhail Gorbachev failed to save communist system in the Soviet Union? -mark the incorrect answer.

Gorbachev reforms were called perestroika and glasnost

The reforms led to inflation but improvement of the supply of goods and food

The wages were higher in the cooperative sector which upset many people who worked in the state enterprises

The reforms would have succeed but the West did not want to lend money to Gorbachev government

3.5 points   

Why we can say that Germany plays the same role for the EU as China for the USA? -mark the correct answer.

Germany imports capital like China

Germany has a financial account surplus

Germany exports manufacturing goods and imports food

Germany is a net exporter of capital and holds the debt of the indebted Europeans

Because not all the EU members are participating

Because the British did not join the EMU

Because the Euro lost the value against the dollar in the recent months

Because it is not the optimal currency area with common budget and monetary policy

Explanation / Answer

1)

Because it is not the optimal currency area with common budget and monetary policy

Reason:-

read the following link:-http://www.researchgate.net/post/Is_Mundells_optimal_currency_area_malfunctioning_in_Europe

2)

This is a fundamental issue of the supranational powers of the EU over the national policies

3)

The EU was created because the West was engaged in Cold War and Europe had to be fast

rebuild

4)

Gorbachev reforms were called perestroika and glasnost

Reason:-

Gorbachev set out with two aims, to free up the economy and to widen the popular base of his hated regime. Perestroika was based on the idea of shaking up industry and allowing limited elements of the market into the Soviet economy.

5)

Germany is a net exporter of capital and holds the debt of the indebted Europeans

Reason:-

nearly half of all EU exports to China come from Germany

Because it is not the optimal currency area with common budget and monetary policy

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