In 1999, the European Union (EU) introduced the euro, a currency that would eventually create a fixed exchange rate system among EU members. Which of the following effects will NOT be produced by the euro?
A) A common monetary policy for the European Union countries.
B) Greater monetary policy flexibility for individual European Union countries.
C) Reduced foreign exchange market speculation.
D) Increased foreign exchange rate stability.

Question

Quizplus · Accepted Answer

The introduction of the euro means that EU countries using it no longer have their own individual monetary policies but instead follow the common policy set by the European Central Bank, reducing their monetary policy flexibility.

In 1999, the European Union (EU) Introduced the Euro, a Currency