The Maastricht Treaty, signed in 1992, initiated: A) European political integrat

Question

The Maastricht Treaty, signed in 1992, initiated:

A) European political integration.

B) an economic and monetary union that featured a common currency.

C) an alliance of nations who opposed environmental harms from trade.

D) an agreement for free flow of labor and other resources across borders.

The decision by a nation to join a currency union is based on:

A) the size of the nation's GDP.

B) the diversification of its industry and population.

C) the cost of designing, printing, and managing a national currency.

D) the costs of abandoning a national currency versus the benefits of a common currency.

An optimum currency union refers to the decision by a country:

A) to join a monetary union that best serves its self interest.

B) to join a free trade area.

C) to dollarize its economy.

D) to eliminate tariffs.

Explanation / Answer

1. The right answer is option A. European political integration.

Explanation: The Maastricht Treaty, earlier known as Treaty on European Union or TEU, was a treaty signed on 7th February 1992 by the European Community members in Maastricht, Netherlands for the political union of Europe. The Treaty resulted in euro and the three-pillar structure of the EU.

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