Asked by Hazeline Sutana on May 05, 2024
Verified
Which of the following was not something that several European nations did or experienced when they became members of the eurozone?
A) They eliminated their own local currencies and adopted a single common currency.
B) They in essence fixed their exchange rates with one another, at a 1-to-1 peg.
C) Cross-border trade among members suffered a huge decline.
D) They gave up control of their own individual monetary policy.
Eurozone
The 19 nations (as of 2019) of the 28-member (as of 2019) European Union that use the euro as their common currency. The eurozone countries are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain.
Exchange Rates
The rate at which one currency can be exchanged for another, influencing international trade and economics.
Monetary Policy
Actions taken by a central bank or financial authority to regulate the supply of money and interest rates in an economy to achieve macroeconomic objectives.
- Comprehend the ramifications of implementing a unified currency on domestic economic strategies.
Verified Answer
LC
Lindia CambridgeMay 09, 2024
Final Answer :
C
Explanation :
When European nations joined the eurozone, they did not experience a huge decline in cross-border trade among members. In fact, one of the goals of adopting a single currency was to facilitate trade by eliminating currency exchange costs and uncertainties, which would likely increase trade among member countries.
Learning Objectives
- Comprehend the ramifications of implementing a unified currency on domestic economic strategies.