The formation of the European Monetary Union is expected to entail benefits for member countries which include all of the following EXCEPT

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BlackTom AI · Accepted Answer

The question asks us to identify which item is NOT a benefit expected from the formation of the European Monetary Union (EMU). 
Option 1: "lower costs of transactions within the EMU." This is generally considered a benefit of having a single currency and integrated financial markets, as there is reduced currency risk and lower transaction costs across member states. 
Option 2: "independent monetary policies run by the central bank of each member country." In reality, one of the core features of the EMU and the European System of Central Banks is the establishment of a common monetary policy managed by the European Central Bank (ECB), rather than independent policies by each member country’s central bank. This means this option describes a situation that does not align with EMU structure and thus is not a benefit. 
Option 3: "enhanced competition among companies in member countries." A common market and price transparency, along with the elimination of exchange rate barriers, typically boost competition across borders within the union, which is considered a benefit. 
Option 4: "greater certainty for investors within the EMU." A single currency and coordinated macroeconomic policy tend to increase predictability and reduce currency risk, giving investors more confidence, which is a benefit. 
In summary, the statements describe several plausible benefits like lower transaction costs, greater competition, and investor certainty. However, the notion of independent monetary policies by each country conflicts with the EMU framework, where monetary policy is centralized under the ECB. This makes option 2 the statement that does not fit the expected benefits of joining the EMU.

2025SummerB-X-ECN306-48565-48566 Exam 2 - Requires Honorlock

The formation of the European Monetary Union is expected to entail benefits for member countries which include all of the following EXCEPT

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