Which of the following is NOT a benefit of a monetary union?
A)Elimination of exchange rate uncertainty
B)Reduced transactions costs
C)Ability to absorb economic shocks
D)Enhanced efficiency and competitiveness

Question

Quizplus · Accepted Answer

While a monetary union can bring about benefits such as elimination of exchange rate uncertainty, reduced transaction costs and enhanced efficiency and competitiveness, it may not always be able to absorb economic shocks. In fact, if one country is hit by an economic shock, the lack of exchange rate flexibility could exacerbate the situation and lead to a wider crisis in the union. Therefore, the ability to absorb economic shocks is not always a benefit of a monetary union.

Which of the Following Is NOT a Benefit of a Monetary