Buy custom What do you understand by Economic and Monetary Union? To what extent does membership of an Economic and Monetary Union constrain a country's use of monetary and fiscal policy
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This means the interest rates are the same for all the single currency countries, thus helping to control inflation. The ?pooling' of such policies should allow for advantages such as a stable economic power to be formed, counteracting the economic superpowers such as the United States of America and China...
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However, through such a Monetary Union, a government loses the ability to increase or decrease interest rates. When their economy is overheating (inflation etc) or experiencing a slump, a country with interest rate changing ability can change interest rates as necessary to counteract the inflation (increase interest rates to encourage saving) or a slump (decrease interest rates to encourage spending)...
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What do you understand by Economic and Monetary Union? To what extent does membership of an Economic and Monetary Union constrain a country's use of monetary and fiscal policy
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