An optimum currency area has all of the following except:
A)zero cost of official interventions in foreign exchange markets
B)No cost of hedging
C)zero cost of exchanging one currency for another to pay for imports of goods and tourist services
D)a common currency for all countries

Question

Quizplus · Accepted Answer

An optimum currency area is a region where a uniform currency and exchange rate are desirable to facilitate economic transactions. Therefore, the presence of a common currency for all countries is an essential characteristic of an optimum currency area. The other options, such as zero cost of official interventions in foreign exchange markets, no cost of hedging, and zero cost of exchanging one currency for another to pay for imports of goods and tourist services, are desirable but not mandatory for an area to be considered an optimum currency area.

An Optimum Currency Area Has All of the Following Except