What is the major problem in a currency union?
A) Money demand becomes more erratic.
B) Participating central banks may not agree on monetary policy.
C) It is akin to dollarization.
D) The capital account becomes difficult to define.

Question

Quizplus · Accepted Answer

In a currency union, participating countries give up their ability to control their own monetary policy, which can create disagreements among central banks on how to manage the economy. This can lead to problems such as inflation or recession in certain countries, and can be difficult to resolve without causing tensions within the union.

What Is the Major Problem in a Currency Union