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Advantages Disadvantages

Maastricht Convergence Criteria
The Maastricht Convergence Criteria is an Real convergence is the similarities in the
effective way of creating monetary structure of economies/ types of
convergence, this refers to similarities in industries. This is not addressed in criteria
inflation, interest rates and the impact of and therefore…

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There is an increase in trade from having a Entry to the Euro Zone means a permanent
single currency as all the prices are the transfer of domestic monetary sovereignty
same. Due to having no transaction costs to the European Central Bank. Britain would
and a good price transparency for…

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One of the motives for FDI is efficiency FDI's are also resource seeking, this refers
seeking, which aims to produce goods and to seeking specific resources which are
services more efficiently (i.e. at lower unit unavailable in the home country, for
cost) than in the home country. Therefore example an…

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This can be done by increasing the supply Due to the lack of competition, inefficient
of a currency or lowering the demand for it.
firms will remain in the market. As the price
(graph) of exports are lower than competitors, who
may be more efficient, inefficient firms will
still be…

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The Harrod-Domar model explains that International `race to the bottom' happens
developing economies have low incomes. when countries compete with each other
Low incomes mean you are likely to have a to see who has the lower taxes, to
low saving ratio. Therefore less money is attract foreign firms. Having…

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If the exchange rate is set below the
market price the domestic country can
benefit. However this leads to international
retaliation, protectionist measures, trade
restriction and quotas.

Floating exchange rate
A system whereby the price of one currency expressed in terms of another is
determined by the forces of demand…


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