Question 4

Ever since Australia and New Zealand signed Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA), many economists and policymakers have argued for the two countries to adopt a common currency say an ANZAC dollar. They argue that Australia and New Zealand satisfy the requirements for adopting a single currency and that both countries would benefit hugely by the removal of uncertainties associated with the fluctuations of their currencies against each other.

For more details on ANZCERTA, refer to the following website:

https://www.dfat.gov.au/trade/agreements/in-force/anzcerta/Pages/anzcerta-its-genesis-and-the-present

create a brief report evaluating the pros and cons of adopting a single currency for Australia and New Zealand. Your report should explicitly address the following questions:

(a) Does Australia and New Zealand satisfy the necessary conditions required for the adoption of a common currency?