The formation of the European Monetary Union is expected to entail benefits for member countries which include all of the following EXCEPT
A) greater certainty for investors within the EMU.
B) lower costs of transactions within the EMU.
C) independent monetary policies run by the central bank of each member country.
D) enhanced competition among companies in member countries.

Question

Quizplus · Accepted Answer

The formation of the European Monetary Union involves the adoption of a common currency, the euro, leading to greater certainty for investors and lower costs of transactions within the EMU. It also enhances competition among companies in member countries. However, the central bank of each member country no longer has the ability to run an independent monetary policy, as monetary policy decisions are made by the European Central Bank. Therefore, choice C is the correct answer as it represents an exception to the potential benefits of the EMU.

The Formation of the European Monetary Union Is Expected to Entail