Reference no: EM133224114

Consider the following questions in relation to the U.S / Euro exchange rate and the relationship between the economies of the United States and the European Union. Whenever you need external research, please use the web sites of the St Louis Fed (FRED), the web sites of the IMF, the Eurostat, the European Commission, the WTO, the CIA Factbook, or other educational, government, and/or academic sources.

Question 1. It is often said and argued that the Euro is in an existential crisis and so is the EMU.

A. Identify some of the reasons for such analyses.

B. How does the theory of the Optimum Currency Areas apply to the performance of the Euro as a common currency

C. Do you think there could be a bright future for the Euro? Why or why not?

Question 2. What was the current account balance of the EMU in 2019?

A. How does the 2019 current account balance compare to the current account balance of the EMU during the two periods when the Euro appreciated/depreciated (the periods you chose above, in Q. 1)?

B. Which members of the EMU can be identified as problematic and why?

Question 3. How big a player is the EMU in world markets, politically and economically?

A. Compare its population, GDP, GDP per capita, trade figures, trade-to-GDP, trade balance, etc. to those of the US.

B. Thinking again in the context of the Optimum Currency Area and related policies, how is the U.S. different than the EMU?