The Canadian perspective
Content
1.Introduction3
2. prey3
3.Execution of the pay back target area3
3.1Monetary Union (MU)3
3.2 muddle7
3.3 Floating3
4.Evaluation and interpretation of the result8
5.References……………………………………………………………………………9
1. Introduction
Countries have unalike options of choosing an exchange rate system which fits their economy best. The option of a transition to a monetary union, a fixed still adjustable exchange rate or a floating exchange rate regime are based on the Optimal Currency Area (OCA) theory, published by Robert Mundell in 1961, which is a geographical region in which economic cogency can be maximized when all members share a rough-cut currency, as they share a high level of counterbalance and integration.
The North American Free trade Agreement which came into forces in 1994 is a treaty between Canada, the Unites States and Mexico, designed to make it trade barriers between these countries and encourage trade in this region. Tariffs were disestablished or invalidated for a period of time. The agreement does not fee-tail supranational functions like in the European Union and is an intergovernmental treaty.
2. Objective
The objective of this research paper is to find out which exchange rate system fits Canadas economy and the other members of the North American Free Trade Agreement best. Therefore benefits and costs of the opposite exchange rate regimes for Canada will be examined.
3. Execution of the set objective
3.1 Monetary Union (MU)
As NAFTA has performed well in the exsert decade in increasing exports, investment flows and total trade, Canada as well as Mexico have taken interest to deepen cooperation and integration through a common currency, to achieve more(prenominal) economic efficiency for maintaining the same exchange rate.
Being a member of a MU lowers transaction costs...If you want to get a full essay, order it on our website: Ordercustompaper.com
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