Understanding the European Economy
36. Marginal Labour Productivity determines:
Wage Level
40. Which of the following sentences is true in relations to migration and Labour Markets:
migration creates winners and losers in both nations, but collectively both nations gain
9. Enumerate the three types of competences as defined by the Treaty of Lisbon
a. Exclusive b. Shared c. Supporting, coordinate or supplement
27. What of the following two principles don't apply to the provision of services in the EU?
a. The principle of the freedom of establishment (freedom for service providers to establish themselves in any EU country while complying with the rules of that country) b. The 'country of origin principle' and the freedom of providing cross-border services (the regulation applying to service providers is exclusively that of the country where the service provided is established and the service 'created') None of them, they both apply
7. Which of the following areas of policy has been centralized in the EU (i.e. where do EU institutions enjoy more powers?)
-customs union -competition policy -eurozone policy -conservation of marine resources -common commercial policy
11. What is the approximate amount of the annual EU budget and what percentage of EU's total GDP does it represent?
130 billion, 1% GDP
31. Which of the following time intervals has been defined the 'Golden Age' of capitalism in Europe?
1950-1973
Which of the following share of votes determines the 'double majority' voting principle in force in the Council of Ministers?
55% of member states representing at least 65% of the EU population
13. What are the two policies that get the most part of the spending?
Agriculture and Cohesion 1. Farming/ Sustainable growth; natural resources 2. Poor regions: economic, social and territorial cohesion
16. Complete the following sentences (cross the wrong fillings): In LME, corporate governance takes the form of firms looking for capitals in (capital markets /banks) and have as a consequence to pay more attention to (share prices & dividends/ long term profits, even at the cost of short term losses). This in turn generates different types of innovation dynamics: in CME innovation is (disruptive & radical/cumulative & incremental) while in LME innovation is (disruptive & radical/cumulative & incremental)
Capital markets Share prices and dividends In CME, innovation is cumulative and incremental In LME, innovation is disruptive and radical
20. 'Negative integration' in the construction of the Single European Market refers to:
Deregulation: the elimination of barriers that restrict the movement of goods, services and factors of production
18. Technical barriers to trade (a.k.a. 'frictional' barriers) are those based off:
Different technical process standards (i.e. relating to the way products are fabricated)
10. EU legal system has grown out of the establishment, by the European Court of Justice, of two fundamental principles. Can you identify them and explain very briefly?
Direct effect: It means that Treaty provisions or other forms of EU law such as directives can create rights which EU citizens can rely upon when they go before their domestic courts. Primacy of EC law: The community law has the final say, had been generally accepted by all EU members. It was repeatedly used to overturn Member State laws. Autonomy: Most European nations have several layers of courts, local, regional and national. The EC legal system is entirely independent of the Member States' legal systems according to the principle of autonomy.
34. If labour force and capital stock move from Spain to Germany:
EU- allocation effect, Ger-Accumulation effect
23. The establishment of the single market in 1992 was facilitated by:
Endorsement of the '1992 SEM programme'; alteration on the decision-making rule in the Council from unanimity to Qualified Majority Voting (except for taxation, free movement of persons and the rights and interests of employed persons); enhancement of the EP powers - cooperation procedure
41. The freedom of movement of workers (i.e. liberalization of domestic labor markets ) has led to massive migratory movements within Europe:
False, although there have been limited South to North in the '60s/'70s and East to West migratory movements since the 2000s
Assign a bias for centralization or decentralization to each of the five categories of criteria for competence allocation
Four Trade-offs (Just found 4 in Decision Making) Diversity of information costs favour ""decentralized"" decision making Scale economics favour ""centralization"" Democracy-as-a-control-device favours ""decentralization"" Jurisdictional competition favours ""decentralization""
33. What is not one of the possible differences in employment and unemployment levels between the Southern and Northern European labour markets?
Gender, education, Youth employment are all valid reasons so it cannot be those for an answer
The theory of fiscal federalism helps explaining:
How a federal government should raise revenue and redistribute it among its constitutive units
38. Integration affects labour markets by:
If wages are flexible and adjustable, we should expect an increase of wages and employment in the contracting sector and the opposite in the expanding sector. There's no reason to believe involuntary unemployment increases.
17. Regarding the demand side of the different forms of VoC, which one features a more flexible and discretionary macroeconomic approach and which one is more rigid and rule based (obviously, pick one for CME and one for LME)?
LME: flexible & discretionary CME: Rigid and rule based
According to empirical observation, the European Parliament voting patterns are:
Left to Right or National to Supranational. Left to Right is similar to US politics with left to right wing and the National is related anti-European positions were the Supranational is related to pro-European position, but party allegiance is much more important than nationality and party line is voted much more frequently than, for example, legislators in the USA
30. The increase in market size has a knock-on effect on the number and size of the firms that will 'survive' the restructuring process. What is the right sequence of events characterizing such a process?
Mkt.Defragmentation > Restructuration > Increased competition
12. Why is the EU budget smaller than that of the US and of its member states (as % of its GDP)?
No funding to military or welfare
22. Has the principle of mutual recognition fuelled a much feared "race to the bottom" in standards across the EU?
No, because same ruling introduced this exception on higher level rather than lower level. The existence of higher standards in countries creates a comparative advantage and allows them to reap the benefits and increase the probability lower countries adapt to the higher standards
42. Complete the following sentence: Immigration can be (positive/negative) for domestic employment when the immigrants (complement/substitute) the skills of the local workers. So far, there (is/is not) evidence that immigration to Europe has had an impact on unemployment levels. The reason might be that European states have picked the (right/wrong) type of workers
Positive, complement, is not, right
19. The EU has regulated, by establishing minimum harmonization rules. the following technical barriers to trade:
Process and product standards
28. What is the most important factor to promote economic growth in the Single Market in the long run?
Productivity
25. In which of the following economic sectors it has proved more difficult to achieve a deep level of market integration:
Service & Utilities sector
8. Where has integration been 'omitted' or weakly pursued
Social Policy (like welfare) and Taxation belong to National Govts
14. The EU budget must be balanced every year
TRUE
Which of the following institutions detains the formal monopoly over legislative proposal (i.e. agenda-setting)?
The European Commission
32. Comparing the EU as a whole and the US, which of the following sentences is true
The US has, in general, lower unemployment and higher employment levels than the EU
24. Positive integration in the single market means:
The creation of a common sovereignty through the modification of existing institutions and the creation of new ones. The White Paper in 1992 added health and safety standards, rules for trademarks and deposit insurance, and solvency ratios for banks and insurance.
How is the principle of subsidiarity related to the distribution of competences?
The principle of subsidiarity pursues two contrasting goals: 1. To allow the EU to act if a problem cannot be addressed by national policies alone and 2. To guard national sovereignty in those areas that cannot be dealt with more effectively at the EU level.
15. In which ways, according to the Varieties of Capitalism literature, do the institutional structure of product markets and wage determination typical of CME incentivize (or not) skill content and levels?
There is a higher value found in employees, their education and continued skill is rewarded as firms seek greater investment from employees and are seeking long term relationships. Wage determination is more centralized. Firms pool resources into highly developed vocational training, usually at the sector level.
39. What are the effects of social policy on labour markets?
Trying to steer markets in terms of coordination, Trade integration favors winners and losers
21. The principle of mutual recognition formulated by the European Court of Justice (ECJ) in 1979 establishes that:
further refinement of the principle of equivalence: member states must allow a product lawfully produced and marketed in another member state into their own market, unless a prohibition of this product is justified by mandatory requirements