Do the costs of forming a currency union fall or rise as the degree of labor market integration rises among member countries?
A) They will rise because any macroeconomic shock in one country will be transmitted to other members when there is greater labor market integration.
B) They will fall because labor market integration allows labor to move to other member countries when there are negative macroeconomic shocks at home.
C) They will rise because labor market integration allows labor to move to other member countries when there are negative macroeconomic shocks at home.
D) The costs of forming a currency union do not depend at all upon the degree of labor market integration among member countries.
Ans: B) They will fall because labor market integration allows labor to move to other member countries when there are negative macroeconomic shocks at home.
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Fill in the blank(s) with correct word
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