The idea that nations in a currency union will have fewer trade barriers or other frictions may have the dual effect of:

Question

Quizplus · Accepted Answer

The idea that nations in a currency union will have fewer trade barriers or other frictions leads to economies of scale and specialization, which can enhance efficiency and productivity. However, it also increases the risk of asymmetric shocks, as countries become more interdependent and any economic disturbance in one country can more easily affect others within the union.

The Idea That Nations in a Currency Union Will Have