CHAPTER 19 TEXTBOOK CARDS

5 characteristics of the European Economic Community?

1.Creation of a common market 2.Emphasis of progressive elimination of tariffs 3.Provision made for an EEC competition policy 4.Creation of common external tariff of 25% 5.Putting in place of common agricultural policy

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5 parts of the institutional stucture of the EU?

1.Council of ministers 2.The commission 3.The European parliament 4.The court of justice of the European family 5.The Eurpoean Central Bank

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6 main functions of the European Central Bank?

1.Maintain price stability-keep inflation below 2% 2.Define & implement monetary policy 3.Suport eco policies of EU members 4.Conduct foreign exchange operations in terms of Euros 5.Authorise issue of bank notes 6.Ensure smooth operation of banking s

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5 benefits of the single market?

1.Economies of scale 2.Increased dynamic efficiency 3.Increased liberalisation=cheap airlines 4.Reduction in export bureaucracy 5.UK citizens have right to work, study or retire in other member states

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5 costs of a single market?

1.May be adverse impact on some sectors of national eco 2.Still W.I.P, gaps in services, transport & energy 3.Services sector opened slower than goods=no increased comp 4.Delays affect financial services & transportation 5.Financial services liberali

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5 types of integration?

1.Performance areas where countries give low tariffs on certain trade 2.Free trade area 3.Customs union 4.Common market 5.Economic union

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When does trade diversioon occur?

As a result of joining a union, a country has to buy goods from higher cost producer inside the union due to operation of the common external tarff

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3 benefits to the UK of new entrants to the EU?

1.Single European market will be expanded & UK is in favour 2.Are free market capitalist eco's with low rates of taxation 3.Are seen by UK as powerful counterweight to combined power of Frace & Germant within EU

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6 consequences as a result of 10 Eastern European countries joining the EU?

1.Increased population 2.Added only 5% to EU GDP 3.Created in some existing members frears about cheap labour 5.Migration of capital from West to new entrants 6.Migration to countries that didnt restrict access

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3 elements to the monetary union?

1.Single currency used by all particpants which replaces all national currencies 2.Interdependent central bank that regulates interest rates and monetary policy 3.Stability & growth pact limiting public sector borrowing of member countries to 3%

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5 beneits of a single currncy?

1.Reduced transaction costs 2.Reduced exchange rate uncertainty 3.Increased intra-EMU competition 4.Increased foreign direct investment 5.Lower interest rates

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Cost of a single currency?

Loss of an interdependent monetary policy

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4 implications of common monetary policy?

1.Speed at which B of E changes interest rate has an effect on labour market & its 'tightness' 2.Asymmetric policy sensitivity 3.Too deflationary 4.EU eco's have inflexible labour markets, & with single currency employment unlikely to decrease

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5 economic tests that Britain would have to pass vefore joning the EMU?

1.Degree of alignment of British & continental business cycles 2.Flexibility of EU markets to cope with eco shocks 3.Effect of monetary union investment in Britain 4.Effect on financial service industy 5.Implications for British employment & growth

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CHAPTER 19 TEXTBOOK CARDS

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