The Theory of an OCA Sets Out Benefits to Be

question 139

Multiple Choice

The theory of an OCA sets out benefits to be derived from increased trade. A comparison of the U.S. currency area with that of the Eurozone reveals that:

• A) interstate and inter-region trade is roughly equal in both areas.
• B) interstate and inter-region trade in the United States is smaller as a percent of gross state product than the same figure for Europe.
• C) interstate and inter-region trade in the United States is much larger as a percent of gross state product than the same figure for Europe.
• D) trade comparisons are largely irrelevant to the success of a currency union.

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Definitions:

Agricultural Products

Physical goods produced through farming or the broader agricultural sector, including both food items and raw materials.

Sugar Price Support

Government intervention to stabilize or increase the market price of sugar through mechanisms such as tariffs, quotas, or direct subsidies to farmers.

U.S. Labor Force

Comprises all the people actively seeking employment and those currently employed within the United States, whether in full-time or part-time positions.

World Price

The international market price of a good or service, determined by world demand and supply.