A Country That Dollarizes

question 95

Multiple Choice

A country that dollarizes

• A)maximizes its seignorage.
• B)earns the same amount of seignorage as it would with a currency board.
• C)earns the same amount of seignorage as it would with exchange-rate targeting.
• D)eliminates its seignorage.
• E)must pay seignorage to other governments to use their currency.

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Definitions:

Negotiation

A strategic discussion that resolves an issue in a way that both parties find acceptable, often used in business to finalize deals, terms, and prices.

Investment Turnover

A metric assessing how effectively a firm turns asset investments into revenue.

Profit Margin

A financial ratio that shows what percentage of sales has turned into profits, essentially capturing the level of profitability of a company.

Return on Investment

A measure of the gain or loss generated on an investment relative to the amount of money invested.