ECB EXAM QUESTIONS AND ANSWERS
In addition to the ECB, which organisations form part of the Eurosystem?
All euro area national central banks
Please choose the correct word to fill in the blank: Deflation, a steady decline in the general
price level, is associated with a flagging economy. Enterprises and consumers are then likely
to _____________ their expenditure on investment and consumption.
Reduce
The ECB's main decision-making body is?
The Governing Council
What currency unit preceded the euro?
ECU
The decision-making bodies of the Single Supervisory Mechanism are
the Supervisory Board and the ECB's Governing Council.
A continuous rise in the price of a single product can be described as inflation. True or false?
False, inflation is characterised by an increase in the general price level. Therefore, a rise in
the price of a single product is not enough to be described as inflation.
In order for the signalling function of prices to be reliable, prices need to be stable. If the
general price level is stable
some prices fluctuate to a certain extent.
Stage One of Economic and Monetary Union (EMU) lasted from 1 July 1990 to 1 January
1994. One of its main goals was to secure the complete liberalisation of capital movements
between the EU Member States. Why was this essential for the preparation for the euro?
Both answers are correct.
Which statement best describes the monetary aggregate M1?
It comprises currency in circulation and overnight deposits.
In order to adopt the euro, a European Union Member State has to have:
an inflation rate which is close to that of the three best performing Member States of the
European Union in terms of price stability.
The ECB's Governing Council meetings dedicated to monetary policy take place ...
Every six weeks
Whose image has been included in the security features of the second series of euro
banknotes?
Europa
, What does the term "Eurosystem" mean?
It's an organisational entity consisting of the European Central Bank and the national central
banks of the euro area countries.
Money serves as:
a medium of exchange, a store of value and a unit of account.
What is the purpose of the Stability and Growth Pact?
To safeguard sound public finances, an important requirement for ensuring the smooth
functioning of Economic and Monetary Union
What are the euro banknotes made of?
Cotton
The ECB's capital is paid by...
the national central banks of all Member States of the European Union.
Inflation is a sustained increase in prices. Which of the following may cause such an
increase?
A sharp increase in the production costs of enterprises
The European System of Central Banks is...
the central banking system of the European Union, comprising the European Central Bank
and the national central banks of the EU Member States.
Which country joined the euro area in January 2015?
Lithuania
What does the Harmonised Index of Consumer Prices (HICP) measure?
The prices of a basket of representative consumer goods and services across all Member
States of the European Union.
Are currencies still convertible into gold (based on the gold standard)?
No, currencies can no longer be converted into gold. We use fiat money.
Which of the following architectural styles does not appear on the euro banknotes?
Post-modern.
How is the value of the euro set in relation to other currencies, such as the US dollar and the
Japanese yen?
The euro floats, i.e. its value is determined freely on the exchange rate markets.
What decision did the ECB's Governing Council take for the first time in June 2014?
To cut the interest rate on the deposit facility to a negative value.
In order to adopt the euro, a European Union Member State has to have
In addition to the ECB, which organisations form part of the Eurosystem?
All euro area national central banks
Please choose the correct word to fill in the blank: Deflation, a steady decline in the general
price level, is associated with a flagging economy. Enterprises and consumers are then likely
to _____________ their expenditure on investment and consumption.
Reduce
The ECB's main decision-making body is?
The Governing Council
What currency unit preceded the euro?
ECU
The decision-making bodies of the Single Supervisory Mechanism are
the Supervisory Board and the ECB's Governing Council.
A continuous rise in the price of a single product can be described as inflation. True or false?
False, inflation is characterised by an increase in the general price level. Therefore, a rise in
the price of a single product is not enough to be described as inflation.
In order for the signalling function of prices to be reliable, prices need to be stable. If the
general price level is stable
some prices fluctuate to a certain extent.
Stage One of Economic and Monetary Union (EMU) lasted from 1 July 1990 to 1 January
1994. One of its main goals was to secure the complete liberalisation of capital movements
between the EU Member States. Why was this essential for the preparation for the euro?
Both answers are correct.
Which statement best describes the monetary aggregate M1?
It comprises currency in circulation and overnight deposits.
In order to adopt the euro, a European Union Member State has to have:
an inflation rate which is close to that of the three best performing Member States of the
European Union in terms of price stability.
The ECB's Governing Council meetings dedicated to monetary policy take place ...
Every six weeks
Whose image has been included in the security features of the second series of euro
banknotes?
Europa
, What does the term "Eurosystem" mean?
It's an organisational entity consisting of the European Central Bank and the national central
banks of the euro area countries.
Money serves as:
a medium of exchange, a store of value and a unit of account.
What is the purpose of the Stability and Growth Pact?
To safeguard sound public finances, an important requirement for ensuring the smooth
functioning of Economic and Monetary Union
What are the euro banknotes made of?
Cotton
The ECB's capital is paid by...
the national central banks of all Member States of the European Union.
Inflation is a sustained increase in prices. Which of the following may cause such an
increase?
A sharp increase in the production costs of enterprises
The European System of Central Banks is...
the central banking system of the European Union, comprising the European Central Bank
and the national central banks of the EU Member States.
Which country joined the euro area in January 2015?
Lithuania
What does the Harmonised Index of Consumer Prices (HICP) measure?
The prices of a basket of representative consumer goods and services across all Member
States of the European Union.
Are currencies still convertible into gold (based on the gold standard)?
No, currencies can no longer be converted into gold. We use fiat money.
Which of the following architectural styles does not appear on the euro banknotes?
Post-modern.
How is the value of the euro set in relation to other currencies, such as the US dollar and the
Japanese yen?
The euro floats, i.e. its value is determined freely on the exchange rate markets.
What decision did the ECB's Governing Council take for the first time in June 2014?
To cut the interest rate on the deposit facility to a negative value.
In order to adopt the euro, a European Union Member State has to have
