Question

Consider each scenario below. Would the economic agent expect a loss or gain from the European monetary union? Why? a. A large automobile manufacturer in Germany. b. The owners of a small family-run restaurant in a village of France. c. A large commercial bank in Sweden.

Answer 1

a) A large vehicle maker should expect gain from European monetary Union :

.Access to the business sectors of Eurozone countries with quicker transactions is given at this point. Exchange costs will fall as banks will charge less. All out assembling costs will likewise decay and benefits will rise.

b) The proprietors of a little family-run café in a town should expect misfortunes.

As a matter of first importance, the proprietors should adjust their business to the situation made by the monetary Union. The adaption procedure itself will be expensive. On the off chance that worldwide monsters from other part countries of the monetary Union endeavor into provincial zones, family-run organizations won't have the option to stand the opposition and will be driven out of the market.

c) A large bank in Sweden should expect gains.

The market structure of transactions is ruled by large banks. An increase in the volume of exchange will bring about an increase in money-related transactions. Regardless of whether charges paid to the banks decreased, large banks will even now have the option to increase their income. There will likewise be a fall in the variable costs. Accordingly, the benefits of the bank will rise.