Which of the following could not be described as an asymmetric macroeconomic shock ?

A. None of these answers All of them are asymmetric macroeconomic shocks
B. A sudden and substantial fall in the worldwide demand for French wine
C. An epidemic of an animal disease in a country that significantly reduces the country’s agricultural output
D. A sudden and substantial rise in prices on the world oil market

Which one of the following is not an argument in support of the UK joining the EMU ?

A. None of these arguments they are all arguments in support of the UK joining the UMU
B. The characteristics of the UK housing market make UK consumers expenditure very sensitive to changes in interest rates
C. The UK risks exclusion from the Euroland capital market with damaging consequences with damaging
D. The UK needs to be a member of the EMU in order to continue to attract such large share of foreign direct investment in EU countries

Which of the following is a problem for fiscal policy in a currency union ?

A. The central bank controls interest rates on long-term bonds issued by the governments of the member countries of the currency union
B. Government of the member countries of the currency union may run large budget deficit and so crowd out private investment
C. government of the member countries of the currency union may run large budget deficits and so impose costs on other countries by pushing up interest rates on the bonds these countries governments issue
D. It is difficult to raise enough tax revenue to pay for the operation of the currency union

What is fiscal federalism ?

A. A fiscal system for a group of countries in which fiscal policy is set in a treaty signed by all the countries
B. A fiscal system for a group of countries in which government budget deficits are strictly limited
C. A fiscal system for a group of countries involving a common fiscal budget and a system of taxes and fiscal transfers across countries
D. A fiscal system in which fiscal policy is jointly determined by local and national politicians

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