An example of an optimal currency area would be

Question

Quizplus · Accepted Answer

The United States would be an optimal currency area because it meets the three criteria necessary for an OCA: high factor mobility, similar business cycles, and fiscal integration. The United States has a highly integrated labor market, with workers able to easily move between states for job opportunities. Additionally, the business cycles of different regions within the United States tend to move in sync with one another, reducing the need for monetary policy adjustments for individual regions. Finally, the United States has significant fiscal integration, with a federal government that redistributes funds across regions to smooth out economic disparities.

An Example of an Optimal Currency Area Would Be