How were the initial members of EMU chosen? How will new members ...

[tnt_battle]

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?

Question 2

In the case of a domestic monetary shock, floating exchange rates
 
  A) make the home economy less vulnerable.
  B) make the home economy more vulnerable.
  C) make the foreign economy more vulnerable.
  D) would not affect the foreign economy.
  E) would not affect the home economy.

[momo1250]

Answer to Question 1

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.

Answer to Question 2

B

[tnt_battle]

Thank you

[momo1250]

Happy to help you