Minto and Maily,two neighboring countries,have the same wage rates,tax regimes,and business cycles.In addition,the two countries have reacted similarly to past economic shocks.Minto and Maily can adopt a common currency because they form a(n)
A)managed currency zone.
B)open exchange regime.
C)optimal currency area.
D)free trade area.
E)advanced monetary zone.

Question

Quizplus · Accepted Answer

Minto and Maily have similar economic conditions and can adopt a common currency as they form an optimal currency area (OCA). This means that they have a high degree of economic integration and coordination, which allows for efficient and stable monetary policy. The other options such as managed currency zone, open exchange regime, free trade area, and advanced monetary zone do not necessarily require similar economic conditions for implementation.

Minto and Maily,two Neighboring Countries,have the Same Wage Rates,tax Regimes,and