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Author Question: What is an optimal currency area? Also, discuss the conditions that must be satisfied for an optimal ... (Read 244 times)

vicky

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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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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





 

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