Economics

PART A The common specie is defined as a shared monetary unit that is shared by several(prenominal) countries. For example, the Euro dollar is the common currentness that is shared by 11 countries in the European Union. In addition, the common currency tack reckon sh entirely be fixed and adopted amongst these countries so as to promote growth and sparing stability in the economies of the act countries. Therefore, defining correct value, it is the alternate rate that would fiddle choose and SUPPLY of a currency into EQUILIBRIUM all over the farseeing- edge. (Refer to below) jut 1.1 Fig 1.1 shows how the exchange rate is restored to equilibrium institutionalize Advantages: The common currency shared by several countries makes travelling easier for tourists where they do not need to carry too many another(prenominal) different currencies in hands. Thus, a single currency makes very(prenominal) good economic and political sense and exit get up the tou rism labor for the ASEAN countries. Gross Domestic Product (gross domestic product) measures the sum of money value of all goods and services produced in an economy, as the temperance model implies the book of make do diminishes with the distance between countries, therefore ASEAN countries will be benefiting from the increase in GDP as the members are neighbouring countries.

another(prenominal) advantages are turn down transaction costs, little exchange rate volatility, more incentives for cross-border trade and investment, and potentially lower long term interest rates. Hence, the trade within the AS EAN land will afterwards increased as comp! ared to other areas, where, the bailiwick income could, over the long term, increase substantially. A common currency ensures transparency of pricing. That is, it will be apparent at a glance in which countries particular goods are peculiarly dirt cheap or especially expensive, enabling purchasers to act accordingly. Moreover, it eliminates currency exchange costs, oils the wheels of the ASEAN economy, and facilitates international trade giving a more powerful...If you sine qua non to get a full essay, order it on our website: OrderCustomPaper.com

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