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the following questions related to the Eurozone (a) (Graph required) Briefly explain how the theory of an optimum currency union indicates whether a country should
the following questions related to the Eurozone (a) (Graph required) Briefly explain how the theory of an optimum currency union indicates whether a country should join a currency union. Use the graph relating the gains and losses of join a currency to identify at what point a country might want to join. (b) Some countries in Europe such as Denmark, Sweden, and Britain have decided not to join the Eurozone even though they could have. Why not? Discuss two possible reasons. (c) (Graph required) The Eurozone has one authority to direct monetary policy yet all sovereign members implement their own fiscal policy. Why could this design lead to problems and how have the Eurozone founders tried to address these problems? Use graphs of the asset market and AA-DD model to show the problem. (d) List the Maastricht criteria for membership in the European Monetary Union. Have members been successful at satisfying these criteria? Why or why not
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