Question

Which of the following best describes how the inception of the euro increased international trade?

The euro was rejected by nearly all EU member countries and had little impact on international business.

The inception of the euro decreased exposure to exchange rate risk among EU member countries.

The inception of the euro drastically decreased the money supply, ultimately leading to less production and trade across the EU.

The inception of the euro gave the EU member countries much more control over their individual monetary policy.

Outsourcing business functions to other countries (increase or decreases) international trade.

Answer 1

Before EUR introduction, the european coutries have their own currencies and were radically different from other non-european countries. Also, these countries were extremely small and are politically as well as economically dependant. The introduction of EURO has primarily united all the european nations and decreased exposure to exchange rate risk among EU member countries. Also, it has helped in promoting trade, encouraging investment, and mutual support between the countries, ultimately leading to international trade.

Answer: The inception of the euro decreased exposure to exchange rate risk among EU member countries.