ECS3703 Assignment 2
Semester 2 2023 (753306)
QUESTIONS AND
ELABORATE ANSWERS
For assignment help and inquiries
Email:
WhatsApp: +254704997747
, Question 1 [25]
Suppose the Sub-Saharan African region intends to adopt a common currency for
its member countries as it would be economically beneficial for the participants
(nations).
(a) What is this arrangement called……………………….…………………… (2)
(b) In your view, would the Sub-Saharan African region have any chance of
benefiting from this kind of arrangement, and why?.................................(10)
(c) Discuss the risks and benefits associated with the adoption of a common
currency……………………….…….…….…………………….……………. (13)
(a) This arrangement is called a "monetary union."
(b) The Sub-Saharan African region could potentially benefit from adopting
a common currency for several reasons:
1. Enhanced Trade and Investment: A common currency would eliminate
exchange rate fluctuations between member countries, making trade and
investment within the region more predictable and less risky. It would
facilitate increased economic cooperation and foster regional trade.
2. Lower Transaction Costs: With a common currency, businesses and
individuals would no longer need to convert currencies when engaging in
cross-border transactions, leading to lower transaction costs and increased
efficiency in the region's economies.
3. Increased Price Transparency: A single currency would promote price
transparency across the region, making it easier for consumers and
businesses to compare prices and make informed choices, leading to more
efficient markets.
4. Monetary Stability: A common currency would be managed by a central
authority, which could help ensure monetary stability and reduce the
likelihood of currency crises in individual member countries.
5. Greater Bargaining Power: As a bloc, the Sub-Saharan African countries
would have a stronger position in international trade negotiations and
For assignment help and inquiries
Email:
WhatsApp: +254704997747
Semester 2 2023 (753306)
QUESTIONS AND
ELABORATE ANSWERS
For assignment help and inquiries
Email:
WhatsApp: +254704997747
, Question 1 [25]
Suppose the Sub-Saharan African region intends to adopt a common currency for
its member countries as it would be economically beneficial for the participants
(nations).
(a) What is this arrangement called……………………….…………………… (2)
(b) In your view, would the Sub-Saharan African region have any chance of
benefiting from this kind of arrangement, and why?.................................(10)
(c) Discuss the risks and benefits associated with the adoption of a common
currency……………………….…….…….…………………….……………. (13)
(a) This arrangement is called a "monetary union."
(b) The Sub-Saharan African region could potentially benefit from adopting
a common currency for several reasons:
1. Enhanced Trade and Investment: A common currency would eliminate
exchange rate fluctuations between member countries, making trade and
investment within the region more predictable and less risky. It would
facilitate increased economic cooperation and foster regional trade.
2. Lower Transaction Costs: With a common currency, businesses and
individuals would no longer need to convert currencies when engaging in
cross-border transactions, leading to lower transaction costs and increased
efficiency in the region's economies.
3. Increased Price Transparency: A single currency would promote price
transparency across the region, making it easier for consumers and
businesses to compare prices and make informed choices, leading to more
efficient markets.
4. Monetary Stability: A common currency would be managed by a central
authority, which could help ensure monetary stability and reduce the
likelihood of currency crises in individual member countries.
5. Greater Bargaining Power: As a bloc, the Sub-Saharan African countries
would have a stronger position in international trade negotiations and
For assignment help and inquiries
Email:
WhatsApp: +254704997747
