An Optimum Currency Area Has All of the Following Except

question 33

Multiple Choice

An optimum currency area has all of the following except:

• A)zero cost of official interventions in foreign exchange markets
• B)No cost of hedging
• C)zero cost of exchanging one currency for another to pay for imports of goods and tourist services
• D)a common currency for all countries

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Definitions:

Relative Decline

A situation where a country, economy, or entity experiences a decrease in its position or condition compared to others.

Consolidation

The process by which businesses combine to form a new entity or one business absorbs another, often to increase market share and reduce competition.

Fixed Costs

Expenses that do not vary with production level or sales volume, such as rent, salaries, and loan payments.

Variable Costs

Costs that change in proportion to the level of production or business activity, such as materials and labor costs.