Europe - The euro
Worksheet - The euro and the ERM - erm what is it?
The aim of this worksheet is to look at how the Single European Currency works and the part the ERM played in preparing for it. It also looks at the arguments about whether the UK should take part in the Single European Currency.
1. Draw a diagram to show what would happen to the ERM if the demand for sterling increased significantly. Give an explanation below the diagram.
Explanation
(10 Marks)
2. What could the government have done to boost the value of the exchange rate if sterling approached its lower limit in the ERM? Explain the process by which this would have worked.
(6 Marks)
3. Where is the European Central Bank (ECB) located?
(1 Mark)
4. Write a short paragraph summarising the work of the ECB.
(5 Marks)
5. What were the convergence criteria set by the Maastricht Treaty in 1993?
a)
b)
c)
d)
e)
(10 Marks)
6. Why was it necessary for the economies of those wanting to join the Single European Currency to be closely in line? What problems might have resulted from a lack of convergence?
(10 Marks)
7. Evaluate the arguments about whether the UK should become a part of a single European currency.
(15 Marks)
Total Marks = 57
