Possible explanations for the "convergence" of market interest rates in Western Europe at the inception of the European Monetary Union (EMU) include:
A) A perceived decline in currency risk as the Euro replaced many traditional currencies
B) The occurrence of the long-awaited turnaround at Euro-Disney
C) A predicted inflation decline due to the new European Central Bank
D) All of the above
E) Choices A and C only

Question

Quizplus · Accepted Answer

The convergence of market interest rates in Western Europe at the inception of the European Monetary Union (EMU) can be attributed to a perceived decline in currency risk with the introduction of the Euro (A) and the establishment of the European Central Bank, which was expected to manage inflation effectively (C). The turnaround at Euro-Disney (B) is unrelated to market interest rates and their convergence.

Possible Explanations for the "Convergence" of Market Interest Rates in Western