How were the initial members of EMU chosen? How will new members be admitted? What is the structure of the complex of financial and political institutions that govern economic policy in the euro zone?
What will be an ideal response?
EU countries should satisfy:
(1 ) Low inflation rate (no more than 1.5 percent above the average of the three EU member states with the lowest inflation).
(2 ) A stable exchange rate within the ERM.
(3 ) Public-sector deficit no higher than 3 percent of its GDP in general.
(4 ) A public debt below or approaching a reference level of 60 percent of its GDP.
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An increase in the budget deficit can be reflected in
A) an increase in private saving. B) a reduction in investment. C) a reduction in net exports. D) all of the above E) none of the above
Recall the Added Perspective on the prisoner's dilemma. When there is a prisoner's dilemma,
a. the prisoners stick to a joint strategy b. each prisoner's best strategy is not to confess c. the prisoners must make a once-and-for-all decision d. game theory does not apply e. there is no mutual interdependence