POST COLD WAR WORLD
INTEGRATION OF EUROPE
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
The euro decreases international trade.
|
|
|
The euro means less business efficiency.
|
|
|
The euro leads to lost control over economic factors.
|
|
|
The euro is associated with national identity.
|
Detailed explanation-1: -The 8 countries choose to use their own currency as a way to maintain financial independence on certain key issues. Those issues include setting monetary policy, dealing with issues specific to each country, handling national debt, modulating inflation, and choosing to devalue the currency in certain circumstances.
Detailed explanation-2: -Key Takeaways. The advantages of the euro include promoting trade, encouraging investment, and mutual support. On the downside, the euro was blamed for overly rigid monetary policy and accused of a possible bias in favor of Germany.
Detailed explanation-3: -Disadvantages Explained Countries can’t print their own currency: Adopting the euro means countries also lose the ability to print their currency. That ability allows them to control inflation by raising interest rates or limiting the money supply.
Detailed explanation-4: -The euro zone’s interest rates do not meet the demands of the British economy. Joining the EMU (European Monetary Union) would have the consequence that Britain would lose control over monetary policy i.e. the ability to set interest rates. This would have a devastating effect on the housing market in particular.