Multiple choice January 2021 exam Flashcards
QUESTION 1. In relation to the process of European integration:
a) The European Union (EU) is an ambitious process of economic integration between a large number of rather similar countries.
b) Turkey joined the EU on 1 January 2017 leading to the EU29.
c) The process of European integration has not been a continuous and smooth process of integration due to a number of political and economic crises.
d) The Single Market Programme intended to create an area without internal frontiers with free movement of goods, persons, services and capital.
c) The process of European integration has not been a continuous and smooth process of integration due to a number of political and economic crises.
d) The Single Market Programme intended to create an area without internal frontiers with free movement of goods, persons, services and capital.
QUESTION 2. In relation to European Union law, institutions and budget:
a) The Treaty of Rome intended to create a unified economic area in order to preserve peace and security in Europe.
b) The European Council is the highest political-level body in the EU and it provides political guidance, while the Council is the main decision-making body of the EU.
c) EU Foreign Trade policy is an exclusive competence of the European Union.
d) Common Agricultural Policy and Regional policy are no longer the main components of the EU’s total budget.
a) The Treaty of Rome intended to create a unified economic area in order to preserve peace and security in Europe.
b) The European Council is the highest political-level body in the EU and it provides political guidance, while the Council is the main decision-making body of the EU.
c) EU Foreign Trade policy is an exclusive competence of the European Union.
QUESTION 3. In relation to economic integration:
a) The EU is an example of regional trade agreements.
b) Economic integration involves discrimination.
c) “Accumulation effects” of economic integration are related to changes in the rate at which production factors are accumulated brought about by economic integration.
d) Trade creation takes place when high-cost home production is replaced by imports from a lower-cost trade partner (prompted by the elimination of trade barriers).
a) The EU is an example of regional trade agreements.
b) Economic integration involves discrimination.
c) “Accumulation effects” of economic integration are related to changes in the rate at which production factors are accumulated brought about by economic integration.
d) Trade creation takes place when high-cost home production is replaced by imports from a lower-cost trade partner (prompted by the elimination of trade barriers).
QUESTON 4. In relation to economic integration:
a) The pro-competitive and market size and scale of economies of scale effects lead to an increase in efficiency through a better allocation of resources.
b) Monetary Union and Single Market are equivalent.
c) The existence of technical barriers and differences in tax systems are among the remaining problems to achieve a truly single European (EU) market.
d) The Banking Union places the European Central Bank (ECB) as the central prudential supervisor of financial institutions in the euro area.
a) The pro-competitive and market size and scale of economies of scale effects lead to an increase in efficiency through a better allocation of resources.
c) The existence of technical barriers and differences in tax systems are among the remaining problems to achieve a truly single European (EU) market.
d) The Banking Union places the European Central Bank (ECB) as the central prudential supervisor of financial institutions in the euro area.
QUESTION 5. In relation to economic growth, labor market and migration:
a) The European economy has performed better than the US economy in the last decades due to its larger productivity growth.
b) The increase in investment in physical capital boosted by economic integration has a finite effect due to the diminishing marginal returns to investment in physical capital.
c) Labour market policies remain “in hands” of each member country of the EU.
d) Nowadays, migration flows within EU countries are very high and similar to those within the US.
b) The increase in investment in physical capital boosted by economic integration has a finite effect due to the diminishing marginal returns to investment in physical capital.
c) Labour market policies remain “in hands” of each member country of the EU.
QUESTION 6. In relation to the Economic and Monetary Union
a) When real exchange rate (e.g consider the Eurozone) rises (e.g. RER=E$/€[P€/P$]), external price competitiveness (of Eurozone) improves.
b) The Eurozone fulfills the Impossible Trinity Principle as it is an area with full capital mobility and autonomous monetary policy together with floating exchange rate.
c) Labour mobility makes it easier to deal with asymmetric shocks within a currency area.
d) The Optimum Currency Area (OCA) criteria include both economic and political conditions that, if fulfilled, both reduce the likelihood of occurrence of asymmetric shocks and make it easier to tackle them.
b) The Eurozone fulfills the Impossible Trinity Principle as it is an area with full capital mobility and autonomous monetary policy together with floating exchange rate.
c) Labour mobility makes it easier to deal with asymmetric shocks within a currency area.
d) The Optimum Currency Area (OCA) criteria include both economic and political conditions that, if fulfilled, both reduce the likelihood of occurrence of asymmetric shocks and make it easier to tackle them.
QUESTION 7. In relation to Macroeconomic Policy in the EMU:
a) The primary targets of the European Monetary Policy are to foster economic growth and to deliver price stability.
b) The challenges to the monetary policy are related to the delay of the monetary policy and the difficulty in developing a unique monetary policy that satisfies the needs of rather different countries.
c) The presence of spillovers/externalities is an argument for some degree of coordination of fiscal policies
d) Higher inflation, economic growth and lower interest rate paid on debt may help to alleviate the problem of sustainability of public debt of a country.
b) The challenges to the monetary policy are related to the delay of the monetary policy and the difficulty in developing a unique monetary policy that satisfies the needs of rather different countries.
c) The presence of spillovers/externalities is an argument for some degree of coordination of fiscal policies
d) Higher inflation, economic growth and lower interest rate paid on debt may help to alleviate the problem of sustainability of public debt of a country.
QUESTION 8. In relation to Common Agricultural Policy (CAP):
a) The CAP has achieved its goal of reducing the number of farmers and farms in the EU.
b) The CAP started as a simple price support policy in 1962 and deliver price stability but led to welfare losses due to an inefficient allocation of resources.
c) “Decoupling” has contributed to solve the budget problem (i.e. the large share of EU’s budget allocated to CAP) and the uneven distribution of payments of the CAP.
d) Recently, direct payments to farmers have been linked to greater respect for the environment and animal welfare.
b) The CAP started as a simple price support policy in 1962 and deliver price stability but led to welfare losses due to an inefficient allocation of resources.
d) Recently, direct payments to farmers have been linked to greater respect for the environment and animal welfare.
QUESTION 9. In relation to Competition Policy:
a) The Treaty of Rome prohibits mergers and acquisitions.
b) Agreements between companies that restrict competition are always prohibited.
c) Holding a dominant market position is illegal.
d) State aid may be allowed if it is related to sensitive sectors (e.g., coal and steel).
d) State aid may be allowed if it is related to sensitive sectors (e.g., coal and steel).
QUESTION 10. In relation to European Regional Policy:
a) Rich regions tend to be geographically peripheral.
b) Major EU funding for less-favoured regions was established by the Treaty of Rome and introduced in the early 1960s.
c) According to the simplest version of Solow’s growth model, economic integration will lead to regional convergence due to the diminishing returns to investment in physical capital.
d) Regional GDP per capita is a key indicator for European Regional Policy.
c) According to the simplest version of Solow’s growth model, economic integration will lead to regional convergence due to the diminishing returns to investment in physical capital.
d) Regional GDP per capita is a key indicator for European Regional Policy.
