As a consequence of competitive pressures,the introduction of the euro has led to lower prices,which translates into substantial gains for European consumers.How has this trend affected European companies?
A)It has resulted in most European companies looking for markets elsewhere where profit margins are not wafer thin.
B)It has produced long-run gains in the economic efficiency of companies because firms were forced to look for ways to reduce their production costs.
C)It has led to large-scale bankruptcies as companies found themselves unable to compete in a low margin scenario.
D)It has led to an influx of even cheaper imports from manufacturing hubs such as China and South East Asia.

Question

Quizplus · Accepted Answer

Faced with lower prices,European producers have been forced to look for ways to reduce their production costs to maintain their profit margins.The introduction of a common currency,by increasing competition,has produced long-run gains in the economic efficiency of European companies.

As a Consequence of Competitive Pressures,the Introduction of the Euro