A(n)______________ should aim at maximizing the benefits from permanently fixed exchange rates and minimizing the costs.
A)optimum currency area
B)adjustable peg system
C)fixed exchange rate system
D)flexible exchange rate system

Question

Quizplus · Accepted Answer

An optimum currency area is a region where a fixed exchange rate system is likely to be most beneficial with minimal costs. In such an area, the economies are closely integrated and similar, making it possible for all the countries to benefit from a common currency. The ECB created the criteria for an optimum currency area, including similar economic structures, labor mobility, and capital mobility. Therefore, an optimum currency area is the best choice for maximizing benefits and minimizing costs for a fixed exchange rate system.

A(n)______________ Should Aim at Maximizing the Benefits from Permanently Fixed