What caused the reduction in transaction costs of doing business in some European countries and the increase in trade among some European countries?

Question

Business

Cristina Carlson

25 October, 02:15

What caused the reduction in transaction costs of doing business in some European countries and the increase in trade among some European countries?

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Answers (1)

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Elsie Bowman · Answer 1

the euro

Explanation:

The euro is the official currency of most of the member states of the European Union (19 out of 28, and soon due to brexit 19 out of 27). The euro is the second most important currency in the world (the US dollar is number 1) since it is the second most traded foreign currency. Almost 350 million Europeans and millions of businesses use the euro on their daily everyday transactions.

The advantage of using one single currency and belonging to a unified market (the Eurozone) is that transaction costs have decreased (no more purchase and sale of currencies) and the total amount of trade between member states has increased.

The euro was first introduced to financial markets on January 1st, 1999, but the actual coins and bills were introduced on January 1st, 2002.