In some parts of the world economic unions have been established. These have introduced a common currency.
What could be an economic disadvantage of introducing such a common currency?
1 )
A bsolute and comparative cost advantages would disappear as a basis for trade.
Devaluation of a member’s currency would no longer be possible.
3 )
Prices of goods and services would be the same over the whole union.
4 )
Trade creation would take place.
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