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| 1 | Fiscal federalism is a framework that useful for thinking about the various trade-offs faced when allocating different types of decisions to the EU versus the Member States |
 | A) | TRUE |
| B) | FALSE |
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| 2 | The Constitutional Treaty, if ratified, would remove the 3 pillars of the European Union |
| A) | TRUE |
| B) | FALSE |
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| 3 | The 'Passage Probability' is a measure of the ease of making decisions. |
| A) | TRUE |
| B) | FALSE |
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| 4 | The passage probability for the Nice Treaty Council of Ministers voting rules is higher than that of the Constitutional Treaty. |
| A) | TRUE |
| B) | FALSE |
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| 5 | For a given group of voters each with a given number of votes, raising the majority threshold from 50% to, say, 72% can never increase the group’s decision making efficiency. |
| A) | TRUE |
| B) | FALSE |
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| 6 | Scale economies is a factor that generally favours placing decision making at the EU level, while local information generally favours placing it at the Member State level. |
| A) | TRUE |
| B) | FALSE |
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| 7 | The Qualified Majority Voting system was first proposed in the Maastricht Treaty. |
| A) | TRUE |
| B) | FALSE |
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| 8 | Subsidiarity is the principle that decisions should be taken as close to the people as possible. |
| A) | TRUE |
| B) | FALSE |
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| 9 | The goal of the Nice Treaty was to ensure the enlarged EU could continue to take decisions in an efficient and legitimate manner |
| A) | TRUE |
| B) | FALSE |
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| 10 | The voting reforms in the Constitutional Treaty were developed even before the voting reforms in the Nice Treaty were tried |
| A) | TRUE |
| B) | FALSE |
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| 11 | Which of the following are the main trade-offs in the theory of fiscal federalism? |
| A) | Lower costs due to scale versus loss from one-size-fits-all policy, efficiency versus legitimacy, wider versus deeper, subsidiarity versus solidarity. |
| B) | Tax rate versus tax base, efficiency versus legitimacy, wider versus deeper, subsidiarity versus solidarity. |
| C) | Lower costs due to scale versus loss from one-size-fits-all policy, informational advantage of taking decisions close to voters versus coordination of multi-district spillovers. |
| D) | None of the above. |
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| 12 | The passage probability is: |
| A) | the probability that any proposal can be passed. |
| B) | an estimate of the fraction of proposal that will actually pass (as opposed to being rejected). |
| C) | the probability that a proposal is passed from the Council to the Parliament. |
| D) | the likelihood that a randomly drawn proposal would pass. |
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| 13 | The Normalised Banzhaf Index of power measures: |
| A) | the probability that a given nation will find itself in a situation where it could break a winning coalition. |
| B) | the likelihood that a nation’s vote will be able to turn a losing coalition into a winning coalition. |
| C) | a measure of a voting system’s legitimacy. |
| D) | the average of every member’s power. |
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| 14 | The main reason that the 2004 enlargement of the EU would have reduced decision-making efficiency is: |
| A) | the newcomers are likely to vote as a block and oppose most proposals. |
| B) | the fact that each nation gets one vote in the Council of Ministers makes it much harder to find a majority with more nations as members. |
| C) | most of the newcomers are small and thus would received a disproportionate number of votes. |
| D) | the efficiency of any voting system decreases whenever more members join, regardless of the distribution of votes. |
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| 15 | If one defines legitimacy as equal power per EU citizen, the allocation of votes in the Council of Ministers: |
| A) | should be proportional to each nation’s population. |
| B) | should give more votes per person to the largest nation. |
| C) | should give one vote to each member state. |
| D) | should follow the square root of each nation’s population. |
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| 16 | External trade policy is an exclusive competency of the EU; this is justified in the theory of fiscal federalism by: |
| A) | scale economies |
| B) | local preferences and informational advantages |
| C) | negative spillovers |
| D) | None of the above. |
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| 17 | In the theory of fiscal federalism an area is more likely to be assigned to the highest level when preferences are very _________ and scale economies are very ___________. |
| A) | homogeneous (the same, or similar), important (high, or big) |
| B) | polarized, small |
| C) | homogenous, small |
| D) | None of the above. |
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| 18 | Under the pre-2004-enlarge system of voting in the Council of Ministers, large countries have more votes than small nations. Is their voting power more or less than population proportionality would suggest? |
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