Why did 12 countries in Europe adopt a single currency, the euro?
A)A single currency reduces transactions costs involved with trade in goods, services, and securities.
B)With the adoption of a single currency, countries would have less autonomy over monetary policy.
C)A single currency should lead to higher economic growth rates for the countries involved.
D)Both a and c are correct.

Question

Quizplus · Accepted Answer

A single currency reduces the transactions costs involved with trade in goods, services, and securities, and it should lead to higher economic growth rates for the countries involved. However, it also means that countries have less autonomy over their monetary policy, as they are no longer able to adjust their interest rates or exchange rates independently.

Why Did 12 Countries in Europe Adopt a Single Currency