The gains from having an optimum currency include
A) price differentiation.
B) lower competition.
C) lower transaction costs.
D) independent monetary policies run by the central bank of each member country.

Question

Quizplus · Accepted Answer

One of the gains from having an optimum currency is lower transaction costs, as there is no need to exchange currencies between member countries. However, the other choices do not accurately represent the gains from having an optimum currency. Price differentiation and lower competition are not necessarily benefits and may be trade-offs of being part of a currency union. Additionally, having an independent monetary policy is not a benefit of being part of a currency union, as member countries must coordinate their policies to maintain the stability of the union.

The Gains from Having an Optimum Currency Include