Exchange Rate Systems and Economic Growth and Development (AQA A-Level Economics): Flashcards
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Practise the cards
10 cards from this deck
Currency union definition
Currency union definition
Agreement between countries to share common currency & policy
When economists date euro's introduction
When economists date euro's introduction
1 January 1999
Treaty that initiated euro creation
Treaty that initiated euro creation
Maastricht Treaty (Treaty of the European Union)
Eurozone members as of Feb 2023
Eurozone members as of Feb 2023
20 EU member states
Two reasons euro was created
Two reasons euro was created
Complete single market & reduce exchange rate instability
Optimal currency area
Optimal currency area
Currency area with conditions for successful common currency
Three requirements for optimal currency area
Three requirements for optimal currency area
High trade, labour mobility, unified fiscal policy
Why eurozone is not optimal currency area
Why eurozone is not optimal currency area
Lacks sufficient labour mobility & common fiscal policy
Fiscal transfers in currency union
Fiscal transfers in currency union
Transfer wealth from richer to poorer regions via tax & spending
How to restore competitiveness without devaluation
How to restore competitiveness without devaluation
Large fall in real wages