The European Economic and Monetary Union

question 31

Multiple Choice

The European Economic and Monetary Union

• A) set up a single currency and sole bank for European economic monetary policy.
• B) eliminated all barriers to trade such as tax differentials between borders.
• C) produced a single government for handling European affairs.
• D) created the Common Agricultural Pact.
• E) eliminated all local currencies in Western Europe.

---

Definitions:

Accounting Profits

The net earnings of a company as calculated by subtracting total expenses from total revenues, according to standard accounting practices.

Perfect Competitor

A theoretical market structure where many firms sell homogeneous products, entry and exit from the market are free, and all participants have perfect information.

Perfectly Elastic

Perfectly elastic describes a situation where the quantity demanded or supplied changes by an infinite amount in response to any change in price, represented graphically as a horizontal line.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded.