An optimal currency area is one in which the ratio of benefits to costs from having a single currency is the highest.

Question

Quizplus · Accepted Answer

An optimal currency area is indeed defined by the condition where the benefits of having a single currency (such as reduced transaction costs and exchange rate stability) outweigh the costs (like the loss of independent monetary policy), thus maximizing the economic efficiency of the region.

An Optimal Currency Area Is One in Which the Ratio