Larger economic benefits from a currency union occur when:
A) there is intense competition between the economies.
B) market integration is large, yielding efficiency benefits.
C) the central bank acts independently.
D) the currency is pegged to the U.S. dollar.
Ans: B) market integration is large, yielding efficiency benefits.
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The business cycle refers to
A) fluctuations in the level of real GDP around potential GDP. B) changes in the level of nominal GDP. C) changes in the level of the stock market. D) changes in the level of employment.
If Italy's real GDP fell from $2.2 trillion one year to $1.9 trillion the next, the annual growth rate would be:
A. 13.6 % B. 15.8 % C. 13.6 % D. 15.8 %
In an efficient economy,
a. no one could be made better off by a change in the way goods are allocated b. revenue for all firms is maximized c. a change in the way goods are allocated could make someone worse off d. goods are allocated fairly among individuals e. no one would be made worse off if there is a change in the way goods are allocated