Question

The price of a bouquet of roses in France is 4 euros. Tom Smith, a frequent international traveler found that a similar bouquet of roses cost only 3 euros in Germany. A benefit of adopting the euro as a common currency is that it

Answer 1

A benefit of adopting the euro as a common currency is that it makes it easier to compare prices across Europe.

Explanation:

When the same currency type is used in different group of people or different geographic locations, it refers to the common currency. In European Nations the common currency that is being used in Euro and in U.S the common currency used is dollar. There are many benefits that are associated with the usage of common currency.

It helps in reduction of transaction cost, Price transparency, expands markets, enhances the currency stability,etc.In the example given, the prices of roses at different regions of Europe were found to be different. The prices of the rises are expressed in Euros. The use of common currency here facilitates and makes easier to compare prices across Europe.