A main disadvantage of the European Monetary Union is that
A) each member country loses the use of monetary policy as to tool to combat recession.
B) there is a high degree of labor mobility among the member countries.
C) prices are highly flexible in response to changing economic conditions.
D) wages are highly flexible in response to changing economic conditions.

Question

Quizplus · Accepted Answer

The European Monetary Union requires member countries to give up control of their own monetary policy, which means that they cannot use interest rates or other tools to address economic recessions. This can be a disadvantage during times of economic downturn, as member countries cannot individually respond to their specific economic needs.

A Main Disadvantage of the European Monetary Union Is That