A Currency Union Would Be Beneficial to Nations with Symmetrical

question 25

Multiple Choice

A currency union would be beneficial to nations with symmetrical demand shocks so that a coordinated monetary policy is possible. Comparing the Eurozone with the United States, the finding is:

• A) the Eurozone nations and the U.S. states are markedly different in the correlation between growth rates of GDP.
• B) the Eurozone nations and the U.S. states are quite similar in terms of correlation between growth rates of GDP.
• C) the Eurozone nations have higher growth rates of GDP in their member states, whereas the United States exhibits lower growth rates.
• D) the Eurozone is much more diverse in terms of its growth in GDP.