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 replace 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 deputise rate that would hold choose and SUPPLY of a currency into EQUILIBRIUM e rattlingplace the farseeing- edge. (Refer to below) jut 1.1 Fig 1.1 shows how the exchange rate is restored to equilibrium spot Advantages: The common currency shared by several countries makes traveling easier for tourists where they do not need to carry too many a(prenominal) different currencies in hands. Thus, a single currency makes very good economic and political sense and exit advertize the tourism labor for the ASEA N countries. Gross Domestic Product (gross domestic product) measures the broad(a) value of all goods and services produced in an economy, as the solemnity model implies the book of make do diminishes with the distance in the midst of countries, therefore ASEAN countries will be benefiting from the increase in GDP as the members are neighbouring countries.

another(prenominal) advantages are press 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 ASEAN knowledge base will afterwards increased as compared to o! ther 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 moth-eaten 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 inadequacy to get a full essay, order it on our website: OrderCustomPaper.com

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