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 currency that is shared by 11 countries in the European Union. In addition, the common currency modify 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 rally rate that would represent choose and SUPPLY of a currency into EQUILIBRIUM over the farseeing- edge. (Refer to below) jut 1.1 Fig 1.1 shows how the exchange rate is restored to equilibrium height Advantages: The common currency shared by several countries makes change of location easier for tourists where they do not need to carry too many another(prenominal) different currencies in hands. Thus, a single currency makes real good economic and political sense and exit march on the tourism labor for t he ASEAN countries. Gross Domestic Product (gross domestic product) measures the enumerate value of all goods and services produced in an economy, as the sombreness model implies the book of make do diminishes with the distance surrounded by countries, therefore ASEAN countries will be benefiting from the increase in GDP as the members are neighbouring countries.

another(prenominal) advantages are discredit transaction costs, slight exchange rate volatility, more incentives for cross-border trade and investment, and potentially lower long term interest rates. Hence, the trade within the ASEAN sphere o f influence will afterwards increased as co! mpared to other areas, where, the subject field 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 rubbishy 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 insufficiency to get a full essay, order it on our website: OrderCustomPaper.com

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