Consensus decision-making process

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A banking crisis in a country in the euro area is a problem for the European Central Bank because:

a) its consensus decision-making process may prompt too rapid a reaction to a crisis in one country.

b) it will violate its money supply growth rule if it bails out that country's bank.

c) it has no mandate to be a lender of last resort to financial institutions in the Eurozone.

d) it will violate its money supply growth rule if it tries to provide liquidity to that country's banks.

2) Adopting a common currency implies which of the following:

a) a common monetary policy will be set by the central bank.

b) no region will lose its monetary autonomy.

c) each region will be able to choose its exchange rate policy.

d) interest rates will be tailored to the business cycle for each region.

Reference no: EM133253272

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