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Author Question: What is an optimal currency area? Also, discuss the conditions that must be satisfied for an optimal ... (Read 246 times)

vicky

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on: Jun 30, 2018
What is an optimal currency area? Also, discuss the conditions that must be satisfied for an optimal currency area to exist.
 
  What will be an ideal response?

Question 2

Which of the following will cause a reduction in the steady-state growth rate of output per worker?
 
  A) a reduction in the saving rate
  B) an increase in the population growth rate
  C) an increase in the rate of depreciation
  D) an increase in the saving rate
  E) none of the above


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joechoochoy

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Reply #1 on: Jun 30, 2018
Answer to Question 1

An optimal currency area would be a region where one currency could be used. There are two conditions needed for this to be successful: similar shocks in the countries and high factor mobility.

Answer to Question 2

E


vicky

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Reply #2 on: Jun 30, 2018
Thank you :)


joechoochoy

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Reply #3 on: Jun 30, 2018
Happy to help you


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