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ECB 25 Years: Euro Introduction
24 Questions
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ECB 25 Years: Euro Introduction

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Questions and Answers

What was the primary purpose of establishing the ECB in 1998?

  • To introduce electronic payments across Europe
  • To promote competition among European countries
  • To launch the euro and protect its value (correct)
  • To replace national currencies with the euro

    • When did the euro become the currency for electronic payments?

  • The information is not provided
  • 1 January 2002
  • 1 June 1998
  • 1 January 1999 (correct)

    • How many European countries are expected to join the monetary union and adopt the euro?

  • All EU countries except Denmark (correct)
  • 20
  • None of the European countries
  • 25

    • What was the date when euro cash replaced the banknotes and coins of national currencies?

    <p>1 January 2002</p> Signup and view all the answers

    Which country has an opt-out and is not expected to adopt the euro?

    <p>Denmark</p> Signup and view all the answers

    What is the primary objective of the Eurosystem and its single monetary policy?

    <p>Maintaining price stability in the euro area</p> Signup and view all the answers

    What does the European System of Central Banks (ESCB) consist of?

    <p>Eurosystem, national central banks, and national banks of non-euro EU Member States</p> Signup and view all the answers

    According to the Treaty on the Functioning of the European Union, what is the Eurosystem's secondary objective apart from price stability?

    <p>Promoting smooth operation of payment systems</p> Signup and view all the answers

    What is the Eurosystem's definition of price stability as adopted by the ECB's Governing Council?

    <p>Year-on-year increase in HICP for the euro area close to 2%</p> Signup and view all the answers

    What are the main disadvantages of a Monetary Union according to the text?

    <p>Implication of loss of interest rate policy and exchange rate policy during national shocks</p> Signup and view all the answers

    The euro was launched on 1 January 1999 as the physical currency for more than 300 million people in Europe.

    <p>True</p> Signup and view all the answers

    Denmark has an opt-out and is not expected to join the monetary union and introduce the euro.

    <p>True</p> Signup and view all the answers

    The primary purpose of establishing the ECB in 1998 was to launch the euro and safeguard its value.

    <p>True</p> Signup and view all the answers

    More than 346 million Europeans across 20 countries use the euro for electronic payments since its introduction in 1999.

    <p>False</p> Signup and view all the answers

    The Eurosystem consists of the European Central Bank (ECB) and the national central banks (NCBs) of the countries that have adopted the euro.

    <p>True</p> Signup and view all the answers

    One of the main disadvantages of a Monetary Union is the loss of interest rate policy and exchange rate policy at the national level.

    <p>True</p> Signup and view all the answers

    According to the Treaty on the Functioning of the European Union, the primary objective of the Eurosystem and its single monetary policy is to maintain full employment.

    <p>False</p> Signup and view all the answers

    The European System of Central Banks (ESCB) includes both the Eurosystem and the national banks of the non-euro EU Member States.

    <p>True</p> Signup and view all the answers

    The Eurosystem's definition of price stability, as adopted by the ECB's Governing Council, is a year-on-year increase in the Harmonised Index of Consumer Prices (HICP) for the euro area below 2%.

    <p>False</p> Signup and view all the answers

    In case of national shocks, fiscal policy remains the only national policy instrument in a Monetary Union.

    <p>True</p> Signup and view all the answers

    The Eurosystem aims to maintain inflation rates above 2% over the medium term.

    <p>False</p> Signup and view all the answers

    One of the criteria for an Optimal Currency Area (OCA) is trade openness.

    <p>True</p> Signup and view all the answers

    Labour mobility is not considered one of the criteria for an Optimal Currency Area (OCA).

    <p>False</p> Signup and view all the answers

    The Eurosystem's primary objective is to maintain financial stability and supervision.

    <p>False</p> Signup and view all the answers

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