EU Institutions
Is responsible for monetary policy in the EU
What is the role of the ECB?
Cannot have fixed exchange rates, open capital market and independent monetary policy
What is the Trilemma?
A nation's right to decide independently on its policies (fiscal, monetary etc.)
What is the subsidiarity principle?
Allowed for speculation
What was the downside of the EMS?
Ratio of prices
What is the real exchange rate?
Settles disputes
What is the role of the EU Court of Justice?
Allocate funds and manage risks
What is the role of financial markets?
Fosters a long-term view of the firm
What is one of the benefits of co-determination policy?
Provided the framework for the EU
What was the role of the Rome treaty?
Price of a currency
Nominal exchange rate
Enforces Treaties, proposes legislation implements EU
policies, surveillance and enforcement (guardian) role
What is the role of the European Commission?
Lead to increased budget deficit
What is a negative effect of tax cuts?
Economically-integrated areas
What are regions?
Increase wages and reduce time spent working
What is the role of unions?
Imports more goods than it exports
When does a country run a CA deficit?
The highest political-level body in the EU:
provides political guidance, it initiates the most important EU initiatives and policies
What is the European Council?
ECB increases interest rates
What is EU's response to inflation?
Aims to accomplish cohesion smart, sustainable and inclusive growth across the EU
What is the goal of EU place-based policies?
There are fewer larger firms that survive
Favourable treatment granted to one country be immediately and unconditionally granted to all other countries
What does the MFN tariff rule stipulate?
Main decision-making body, consists of one representative from each EU member
What is the EU Council of Ministers?
In theory nothing should happen, but in practice, expectations kick in and the markets tumble
What happens when there is contractionary monetary policy and tax cuts?
It is a redistribution mechanism within the EU
What is one of the functions of the Next Gen EU program?
What happens if there is an inflow of migrant from country A to country B
The country's exports become competitive
What happens when a country's exchange rate depreciates?