Which of the following cases is an OCA that is NOT preferred by a home country?

Question

Which of the following cases is an OCA that is NOT preferred by a home country?

A) The home country faces symmetric shocks with the other country.

B) The labor market is well integrated, allowing for migration.

C) The home country faces asymmetric shocks with the other country.

D) The home economy is well integrated with the other country, carrying out vast amounts of trade.

The Maastricht Treaty of 1991 provided for all of the following, EXCEPT:

A) an enlargement process to include more European nations.

B) a ban on nations opting out of a currency union.

C) a rename of the EC to the European Union.

D) a notion of EU “citizenship.”

Explanation / Answer

1. Option C

If a country aces asymmetric shocks with the other country, then it becomes very difficult and costly for a country to join a currency Union or OCA. This is not preferred by the home country.

2. Option B

the Maastriht treaty of 1991 is majorly known for the establishmnet of the European Union. It provide all of the above except a ban on nations opting out of a currency union.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.