Business Paper 3 - European Union (312)

European Union

a political and economic union of 27 member states that are located primarily in europe - estimated total population of 447 million

European Union (Advantages + Disadvantages)

Advantages:

• increase in market size

• lower administration costs to trade

• greater access to cheap factors of production

Disadvantages:

• greater competition

• increased costs

Single European Currency

euro

Eurozone - having the euro (Advantages + Disadvantages)

Advantages:

• lower transaction costs

• price transparency

• elimination of uncertainty due to exchange rate fluctuations

Disadvantages:

• fluctuations in exchange rates

• interest rate is controlled by central European bank and not Bank of England so may not benefit the UK compared to European countries