Unit 3 - 3 Flashcards
1
Q
What are the benefits of the CAP?
A
- Prevented food shortages
- Stabilised farm Incomes
- Reduced price fluctuations
- Reduced dependence on M
2
Q
What are the problems with the CAP?
A
- Intervention price set above free market price = encouraged over production of many products and the European tax payer would be paying for buying and story surpluses
- Prices high to consumers compared to world prices
- Harmful effects on the environment as intensive production techniques encouraged
- By exporting to developing countries it adversely affects domestic farmers
- Import tariffs and export subsidies distort world markets and are particularly harmful to developing countries
3
Q
What is the Eurozone?
A
Refers to the EU member states that have adapted to the euro currency union
18 countries
4
Q
What is the ECB responsible for?
A
- Issuing €
- Setting Europe-wide interest rates
- Managing the ER of the € against other countries
5
Q
What must you do to join the Eurozone?
A
- Match the inflation rates
- Achieve a stable ER
- Match interest rate
- Match budget deficit
6
Q
What are the positives of adopting the Euro?
A
- Eliminates transaction costs
- Reduced uncertainty of ER fluctuations
- Increased transparency - easier to compare prices
- Increased merger activity
7
Q
What are the negatives of adopting the Euro?
A
- Loss of control by individual governments - loss of ability to set interest rates
- Need to redesign, packaging, advertising
- Need to adopt equipment plus train workers - increase costs for firms
8
Q
What is the social chapter?
A
An agreement between member states to introduce common social policy
Attempts to encourage minimum wages and better conditions of work in member countries
9
Q
What are the laws of the social chapter?
A
- Works council directive
- Working time directive
- Parental leave directive
- Part-time directive
10
Q
What are the characteristics of Newly Industrialised Countries?
A
- High EG rates
- Rising X sales
- Rising SoL
- Rapid development of manufacturing industry
- Increased levels of education and training
11
Q
What have NICs developed?
A
- High rates of capital investment financed by consumer savings and high X sales
- Large investment in education and training
- Movement of labour from low productivity industries to higher productivity ones
12
Q
What are examples of NICs?
A
- Taiwan
- Singapore
- South Korea
- Brazil
- Vietnam
13
Q
How does the CAP work?
A
- A guaranteed price was set for different products
- If the market price was below the intervention price the the EU bought and stored any surplus output
- If farmers could export their surplus then they received a subsidy equal to the difference between the world price and the intervention price
- EU farmers also protected from outside comp by tariffs on imported farm products
