Question: Consider two countries that are currently pegged to the euro: Lithuania and Comoros. Lithuania is a member of the European Union, allowing it to trade
Consider two countries that are currently pegged to the euro: Lithuania and Comoros. Lithuania is a member of the European Union, allowing it to trade freely with other European Union countries. Exports to the Eurozone account for the majority of Lithuania’s outbound trade, which mainly consists of manufacturing goods, services, and wood. In contrast, Comoros is an archipelago of islands off the eastern coast of southern Africa that exports food commodities primarily to the United States and France. Comoros historically maintained a peg with the French franc, switching to the euro when France joined the Eurozone. Compare and contrast Lithuania and Comoros in terms of their likely degree of integration symmetry with the Eurozone. Plot Comoros and Lithuania on a symmetry-integration diagram as in Figure 8-4 (19-4).
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