In the Early 2000s, Ecuador Replaced Its Currency, the Sucre

question 54

Multiple Choice

In the early 2000s, Ecuador replaced its currency, the sucre, with the U.S. dollar as its official currency. What will no longer be possible for the government of Ecuador?

• A)Financing government deficits by printing money.
• B)Financing government deficits by borrowing in the financial markets.
• C)Running a balance of payments deficit on the current account.
• D)Running a balance of payments deficit on the capital account.

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Definitions:

Binomial

Pertaining to a probability distribution that models the number of successes in a fixed number of trials, with only two possible outcomes.

Normal Probability Distribution

Describes a symmetrical, bell-shaped curve where most occurrences take place at the central peak and probabilities for values taper off equally on either side.

Binomial Probability Distribution

A probability distribution that summarizes the likelihood that a variable will take one of two independent values under a given set of parameters or assumptions.

Continuous Variables

Variables that can take an infinite number of values within a given range, including decimals and fractions.