What is the major problem in a currency union?
A) Money demand becomes more erratic.
B) Participating central banks may not agree on monetary policy.
C) It is akin to dollarization.
D) The capital account becomes difficult to define.
Question 2
Subject to a few legal and practical restrictions, anything may be exchanged for anything else. The distinctive advantage of money is that ________.
A) it is likely to retain its value, whether it is kept or exchanged
B) it has little, if any, use other than exchange
C) it can generate income while it is kept
D) it is likely to be accepted by everyone in exchange for anything
E) none of the above
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