Which of the following is a drawback to having a common currency across countries, as in the European Union?
A) Having a common currency implies that the prices of goods across countries must always be the same, regardless of consumer preferences for goods across countries.
B) A common currency increases barriers to trade across countries, reducing opportunities for economic growth.
C) With a common currency, individual countries are no longer able to run independent monetary policies.
D) None of the above is a drawback to a common currency.
C
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While many analysts defended the actions taken by the Fed and the Treasury to respond to the financial crisis in 2008, others were critical of these actions. The critics were concerned that by not allowing large firms to fail
A) stockholders and bondholders of these firms were not allowed to receive the proceeds from the sale of assets that would have occurred if the firms had declared bankruptcy. B) there is an increased likelihood that other firms will engage in risky behavior in the future with the expectation that they will also not be allowed to fail. C) there will be less competition in the U.S. economy, which could led to higher prices for consumers. D) smaller firms will resent not receiving similar assistance.
A production indifference curve describes the input combinations that will produce a given output.
Answer the following statement true (T) or false (F)
Christina Romer argued that
A) measured properly, GNP before 1929 varied substantially less over time than the official statistics showed. B) measured properly, GNP after 1929 varied substantially more over time than the official statistics showed. C) measured properly, economic expansions after 1929 were shorter than the official statistics showed. D) measured properly, economic expansions before 1929 were shorter than the official statistics showed.
A formalwear shop will earn a net income of $1,500 per year on a tuxedo. A tuxedo is good for two years, after which it will be worn out and worthless. If the interest rate is 10 percent (0.10) per year, what is the present value of a new tuxedo to the shop? (Assume that each year's income is received at the end of the year.)
a. $148.76 b. $2,955.30 c. $2,955.59 d. $2.603.31 e. $3,000.00