Seventeen European countries use the euro as their common currency. This arrangement is best described as a:
A) currency union.
B) free trade area.
C) common market.
D) monetary union.
Ans: A) currency union.
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Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC1), Plant 2 (ATC2), Plant 3 (ATC3), and Plant 4 (ATC4). Dustin's Plant 2 will be economically efficient if the firm produces
A) 2,000 copies per day. B) 4,800 copies per day. C) 5,300 copies per day. D) 6,000 copies per day.
In the fooling model's labor market diagram, from an initial intersection point of the labor supply and demand curves, tracing "northeast" up the labor supply curve shows
A) what happens to real wages and employment when aggregate demand expands. B) what happens to real wages and employment when aggregate demand contracts. C) what workers think is happening to real wages if an aggregate demand expansion fools them. D) what firms think is happening to real wages if an aggregate demand expansion fools them.