Great Britain Opted Out of the ERM in 1992 Because

question 36

Multiple Choice

Great Britain opted out of the ERM in 1992 because its government concluded that:

• A) it wanted to increase its trade with North America rather than Europe.
• B) the gains from being a member of the ERM outweighed the costs from higher German interest rates.
• C) the costs associated with higher German interest rates outweighed the gains from being a member of the ERM.
• D) it was unable to agree with the French on an exchange rate between the pound and the French franc.

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