gcse economics - international trade - european monetary union
HOW WOULD THE UK’s ECONOMICS CHANGE?
1. A single currency (the Euro) would replace the £. The Euro would be used throughout Europe
2. There would be no exchange rates between Euro countries. This is because the £, Deutschmark, Franc would no longer exist
3. A central interest rate for the whole of Europe. The UK would no longer have its own interest rate
ADVANTAGES OF EMU |
DISADVANTAGES OF EMU |
No need to change money into foreign currencies.
This will save time and money. This is good for businesses and tourists |
The UK government will not be able to change interest
rates in order to manage our economy |
It is easier to compare prices in different countries.
This is because all figures are quoted in Euro’s. |
Businesses have to change their tills and payment
systems |
Reduced exchange rate uncertainty. International
trade becomes easier because exchange rates can’t effect prices |
Businesses have to change their tills and payment systems |
More foreign businesses may choose to set up in the
UK if we are using the same currency as the rest of europe |
The UK government won’t be able to lower the
exchange rate in order to become more competitive |
The Euro commenced on 010102.
At present the UK has not joined EMU although it may do in the future
The UK trades £ for Euros when trading with its European partners. Therefore changes in the exchange rate between the £ and Euro are very important.
ACTION
a. Do you agree with EMU?
b. Can you remember the 3 key features of EMU?
These GCSE Economics revision notes have been kindly provided by Peter Davies of Mill Hill School, Ripley Keep Up-todate with your GCSE Economics - Subscribe Free to Economics in the News by Email
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