Which of the Following Is True for an Economy That

question 98

Multiple Choice

Which of the following is true for an economy that forms a monetary union with other countries?

• A) It becomes more flexible in dealing with business cycles but less stable.
• B) It becomes more stable but relatively inflexible in dealing with business cycles.
• C) Its net exports will fall as price transparency in trade will reduce.
• D) Since it faces increasing currency instability, private investment in the economy will fall.