In view of the theory of optimum currency areas, a country would be a good candidate for membership in such an area if it had a __________ degree of factor mobility with other potential member countries of the currency area and if the country were a relatively__________ economy.
A) low; closed
B) low; open
C) high; closed
D) high; open

Question

Quizplus · Accepted Answer

According to the theory of optimum currency areas, a country would be a good candidate for membership in such an area if it had a high degree of factor mobility with other potential member countries of the currency area and if the country were a relatively open economy. This means that people, goods, and capital should be able to move easily between the member countries, and the economies of the member countries should be closely integrated. Therefore, the best choice is option D: high degree of factor mobility and open economy.

In View of the Theory of Optimum Currency Areas, a Country