Question

Read the Exert and answer the following questions, give evidence in your answers:

"The Euro as a Common Currency, On January 1, 2002, a new currency—the euro—was put into full use in
12 European countries, each a member of the European Union (EU). The symbol for the euro is €. This adoption of a common currency marked the first time that such a large area willingly entered into a monetary
union. The step was one more milestone in the economic consolidation of Europe. Ten Eastern European countries that were admitted to the EU in 2004 also plan to adopt the European currency in time. The European Union introduced the euro to make trade among member nations easier and cheaper. Adoption of the euro also was an important step in the economic and political integration of Europe. Like all modern currencies, the euro is categorized as fiat money. Its
value is derived from public confidence in the European Union. Control of the supply of the euro is maintained by the European Central Bank located in Frankfurt, Germany. Each member nation of the EU has a seat on the Central Bank's decision-making board."
1.Making Inferences: How do you think having a common currency
might benefit the EU?

2. Recognizing Effects: Why does the euro have value as currency?

Answer 1

Having a common currency benefits the EU by increasing trade, promoting economic integration, and ensuring stability and credibility.

Step-by-step explanation:

Having a common currency, such as the euro, benefits the European Union in several ways:

1. Increased trade: A common currency eliminates the need for currency exchange, making trade among member nations easier and cheaper.
2. Promotion of economic integration: The euro fosters economic and political integration as it symbolizes unity and cooperation among member nations.
3. Stability and credibility: The euro has value as a currency because it is backed by the European Union, which maintains control over the supply of the euro and ensures its stability. This creates public confidence in its value.