If a Currency Union Lowers the Cost of Trade and Therefore

question 72

Multiple Choice

If a currency union lowers the cost of trade and therefore promotes increased trade, the Euro-optimists believe that:

• A) a currency union at some point will no longer be necessary.
• B) at some point the OCA criteria will be satisfied.
• C) the benefits of having an independent monetary policy will outweigh the benefits from the currency union.
• D) the currency union may never be beneficial to an individual nation, but it does reduce political tension in large regions.

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Definitions:

Preferential Payment

A payment made by an insolvent debtor that gives preferential treatment to one creditor over another.

Voluntary Petition

A legal document filed by an individual or entity declaring their intent to undergo bankruptcy proceedings under their own accord.

Bankruptcy Relief

Legal measures available to individuals or corporations that cannot meet their financial obligations, allowing for reorganization or discharge of debts.

Preferential Payment

A financial transaction that gives prior payment to one creditor over others before a debtor's bankruptcy.