The European Montary Union Flashcards
What is the European Monetary Union?
The European Monetary Union consists of the 20 EU countries that use the euro as their currency.
Do all EU countries use the euro?
No, some EU member states, such as Denmark, do not use the euro.
What is an advantage of using the euro for businesses?
It reduces business costs by eliminating currency exchange fees within the Eurozone.
How does the euro affect interest rates?
The euro’s stability results in lower interest rates, reducing government borrowing costs.
How does the euro promote price stability?
The euro aims to maintain low inflation rates, contributing to stable prices over time.
How does the euro influence trade between Eurozone countries?
A single currency facilitates easier and more efficient trade, boosting economic interactions.
What is the benefit of price transparency with the euro?
Consumers can easily compare prices across countries, promoting competitive pricing.
What is a disadvantage of using the euro for countries like Ireland?
Ireland has limited control over monetary policy, which is set by the European Central Bank.
How does the euro increase competition?
The common currency reduces market barriers, leading to heightened competition among businesses.
Why is the UK’s absence from the Eurozone a disadvantage for Ireland?
The UK’s non-use of the euro complicates trade and economic relations with Ireland.
