When two or more countries achieve monetary in interrogation the economies of the two countries use blank currency, and have blank
The correct answer and explanation is:
The correct answer is:
the same currency; the same monetary policy
Explanation:
When two or more countries achieve monetary integration, it means they coordinate or unify their monetary systems to function as a single entity in specific financial aspects. The deepest form of monetary integration is a monetary union, where countries adopt a single currency and share a common monetary policy, usually managed by a central authority like a supranational central bank.
A key example is the Eurozone — a group of European Union (EU) countries that have adopted the euro (€) as their official currency. These countries no longer use their national currencies (like the French franc or German mark) and instead use the same currency, the euro. This arrangement is managed by the European Central Bank (ECB), which sets a common monetary policy (interest rates, money supply control, inflation targets) for all member countries.
This form of integration has several benefits:
- Price stability and transparency: Using the same currency removes exchange rate fluctuations and makes price comparisons easier.
- Reduced transaction costs: No need for currency exchange when trading between member countries.
- Increased economic efficiency: A unified monetary policy can help stabilize the economy across all member states.
However, challenges also arise:
- Loss of individual control: Countries cannot set their own interest rates or devalue their currency in response to national economic conditions.
- Asymmetrical shocks: A policy that benefits one country may harm another if their economies are at different stages of the economic cycle.
In summary, when countries reach full monetary integration, they use the same currency and share a single monetary policy, which helps unify their economies but also limits national economic flexibility.