Question

What if Connecticut and rhode island each have their own currency

Answer 1

If Connecticut and Rhode island each have their own currency, then it would be more difficult to trade and enact federal monetary policy.

What happens if states have their own currencies?

If states like Connecticut and Rhode island had their own currencies, it would lead to a situation where trade between the two states is harder because the currencies would have to be converted before they are used to trade. This might reduce the volume of trade between the two states if the process is difficult.

Connecticut and Rhode island having their own currencies would also make it difficult for the Federal Reserve to enact a unified monetary policy that is based on the U.S. Dollar which would make it harder to manage the economy.

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