A single currency area requires
A)mobile labor and synchronized business cycles.
B)immobile labor and synchronized business cycles.
C)immobile labor and mobile capital.
D)mobile labor and unsynchronized business cycles.

Question

Quizplus · Accepted Answer

A single currency area requires mobile labor and synchronized business cycles. Mobile labor enables the adjustment of wages and employment levels between different regions of the currency area, while synchronized business cycles ensure that there is no undue strain on some regions or countries within the currency area. This reduces the risk of macroeconomic imbalances and ensures that the benefits and costs of monetary union are equitably shared.

A Single Currency Area Requires