(Last Word) Which nations stand to lose the most from belonging to a common currency?
A) those whose macroeconomic conditions differ signiﬁcantly from the rest of the nations in the currency area
B) those who engage in the largest amount of foreign trade
C) those with the largest economies of the nations in the currency area
D) those with the least restrictive laws and lowest production costs

Question

Quizplus · Accepted Answer

Nations whose macroeconomic conditions differ significantly from the rest of the nations in the currency area are likely to face challenges in adjusting to a common currency. This is because a common currency means that they will not be able to use monetary policy to address their unique conditions. For example, during the European debt crisis, countries like Greece and Spain faced significant economic challenges due to their inability to devalue their currency and adjust monetary policy to address their economic conditions.

(Last Word) Which Nations Stand to Lose the Most from Belonging