Which of the following is a drawback of adopting the euro?
A)loss of control over national monetary policy
B)increase in the cost of capital
C)reduction in the liquidity of capital markets
D)reduction of price differentials within the euro zone
E)loss of investment options open to both individuals and institutions

Question

Quizplus · Accepted Answer

Adopting the euro means that a country gives up its national currency and therefore loses control over its own monetary policy. This can be a drawback as it makes it difficult for a country to respond to economic situations and crises using tools such as interest rates, exchange rates, and money supply adjustments.

Which of the Following Is a Drawback of Adopting the Euro