CHAPTER 10 QUIZ 25

CHAPTER 10 QUIZ 25
Potential Effects if the United Kingdom Adopted the Euro. The U.K. still has its own currency,
the pound. The pound- interest rate has historically been higher than the euros interest rate. The
U.K. has considered adopting the euro as its currency. There have been many arguments about
whether it should do so.
Use your knowledge and intuition to discuss the likely effects if the United Kingdom adopts the
euro. For each of the 10 statements below, insert either INCREASE or DECREASE and complete
the statement by adding a clear short explanation (perhaps one to three sentences) of why the
U.K.- adoption of the euro would have that effect.
To help you narrow your focus, follow these guidelines. Assume that the pound is more volatile
than the euro. Do not base your answer on whether the pound would have been stronger than the
euro in the future. Also, do not base your answer on an unusual change in economic growth in the
U.K. or in the euro zone if the euro is adopted.

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