Criteria used to predict the benefits of fixed exchange rates can be applied to benefits from an optimum currency union. Generally, benefits are higher whenever the:
A) home country has balanced trade with its union partners.
B) home country's economy is dissimilar to that of its union partners.
C) home country's economy is similar to that of its union partners and it suffers similar types of economic "shocks."
D) home country has large and growing trade imbalances with its union partners.
Ans: C) home country's economy is similar to that of its union partners and it suffers similar types of economic "shocks."
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