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Single common currency for three nations

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Suppose the governments of the U.S., Canada, and Mexico plan to merge into a single nation. One step in that direction would be to have a single common currency. Assume the Canadian economy is very strong, the U.S. economy is not as strong but still in reasonably good shape, and the Mexican economy is doing well but is fragile. There is uncertainty about the Mexican economy-it may continue to do well or slide into a recession fairly quickly. Discuss the benefits and costs of having a single common currency for these three nations.

Reference no: EM131205153

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