The Pros and Cons of a Single Currency
Some nations opt to use the same currency as other countries, such as the Euro Zone, and Zimbabwe using US dollars.
One advantage of adopting another currency is if the country is suffering from hyperinflation, as was the case with Zimbabwe. After having an inflation rate of over 500%, they gave up on it and just used American dollars, which lowered the prices in Zimbabwe significantly.
Another advantage is that one can travel to one country to another and not have to change currency. This would be useful in the Euro zone, especially as the countries in the Euro zone are close to one another, and people would presumably travel to other countries quite often.
A disadvantage is that the entire area is affected by changes in the exchange rate. If the demand for French exports decreases, then the Euro will depreciate. Then other countries may have to buy their own currency to reduce the supply of it, to try and appreciate it again.
