In practice, under the EMS, a member country:
A) had complete freedom in choosing the interest rate it wanted.
B) had complete freedom in choosing its interest rate only if it is a very small country.
C) could change its interest rate only if other countries changed theirs as well.
D) could never change its interest rate.
E) must apply to a special European Commission in order to change its interest rate.

Question

Quizplus · Accepted Answer

Under the EMS, member countries were only able to change their interest rates within a predetermined range, known as the "exchange rate mechanism" (ERM). These adjustments were only allowed if other member countries made similar adjustments to maintain relative stability in exchange rates. Therefore, each country's ability to change their interest rate was dependent on the actions of the other member countries in the EMS.

In Practice, Under the EMS, a Member Country