The OCA of the European Union falls short of the United States, for each of the following reasons, EXCEPT:

Question

Quizplus · Accepted Answer

The Optimal Currency Area (OCA) theory suggests that for a region to successfully share a single currency, it must have certain characteristics, such as labor and goods market integration, fiscal transfers to cushion economic shocks, and symmetric shocks across the region. The statement that the European Union has more asymmetric shocks is not a reason why its OCA falls short of the United States. In fact, having more asymmetric shocks would argue against the success of a single currency area, but the reasons the EU's OCA might fall short compared to the US include weaker labor and goods market integration and negligible fiscal transfers, not the prevalence of asymmetric shocks.

The OCA of the European Union Falls Short of the United