Which of the following is true about how the euro will impact the pan-European capital market?
A) It will raise the cost of capital.
B) It will lead to a decline in the overall level of savings and investment.
C) It will increase efficiency with which investment funds are allocated.
D) It will lead to reduced liquidity in the market.

Question

Quizplus · Accepted Answer

The introduction of the euro has led to the development of a pan-European capital market, which allows for more efficient allocation of investment funds across countries. This is because it eliminates currency risk and makes cross-border transactions easier. Therefore, C is the correct choice. A and D are incorrect as the euro has actually lowered the cost of capital and increased liquidity in the market. B is also incorrect, as there is no evidence to suggest that the euro has led to a decline in savings and investment.

Which of the Following Is True About How the Euro