For participating countries,a drawback of a single currency in Europe is that
A) costs for doing business will increase.
B) it will be more difficult to attract imports.
C) national authorities will lose control over monetary policy.
D) it will be more difficult to compare prices across Europe.
E) foreign currency exchanges will have to be made through the European Central Bank in Frankfurt.

Question

Quizplus · Accepted Answer

With a single currency, national authorities lose control over monetary policy. This means that they cannot independently set interest rates, control the money supply or manipulate their currency's exchange rate. This could be a drawback as countries may have different economic needs and priorities which are not reflected in a common monetary policy.

For Participating Countries,a Drawback of a Single Currency in Europe