Title: Single Currency: Pros a& Cons
Headings: Advantages and Disadvantages of a Single Currency.
Advantages and Disadvantages of a Single Currency.
Content: Facilitate market expansion. However, prices differences would still exist in a single currency area due to transportation costs, storage costs, and other operation costs. There would be price differences between a bottle of 500g ABC olive oil sold in the local Mr. Pinocchio store and that sold in the local chain shopping mall. There would also be price differences between a bottle of 500g ABC olive oil sold in the local Mr. Pinocchio store and that sold in a store in another city or even country. Such price differences and price transparency may encourage firm ABC that sells olive oil to expand its market within the currency area. Lower transaction costs, elimination of exchange rate fluctuations, and price transparency will give incentive for firms to expand their markets within the single currency area. This would also generate investment and employment. A more stable currency. The Euro would be more stable, that is, experiences less exchange rate fluctuations when compared to national currencies because the "value" of Euro reflects the average economic conditions of the whole Union and not that of a single national economy. Moreover, Euro would enjoy more credibility because it is used in a larger currency zone.