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Recall Application 3, "A Downside to the Euro," to Answer

Question 1

Multiple Choice

Recall Application 3, "A Downside to the Euro," to answer the following questions:
-According to the application, how did countries like Spain and Greece benefit from being members of the Euro- zone?


A) By using the euro, Spanish and Greek exporters can sell their goods to other countries without an exchange rate premium.
B) By using the euro, investors would be assured that Spain and Greece would pursue inflationary policies.
C) By using the euro, Spain and Greece now have full control of monetary policy.
D) By using the euro, investors would no longer fear that Spain and Greece would pursue inflationary policies.

Correct Answer:

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