For Ecuador,the Result of Adopting the Dollar as Its Official

question 104

Multiple Choice

For Ecuador,the result of adopting the dollar as its official currency is that

• A) its government cannot capture revenue (seigniorage) by issuing currency
• B) there tends to be greater promise of lower interest rates and greater financial stability
• C) the rate of inflation in Ecuador is tied to that of the United States
• D) all of the above

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Definitions:

Equity Methods

An accounting technique used to record investments in associate companies, where the investment is initially recorded at cost and adjusted according to the investor's share of the investee's profits or losses.

Cost

The amount of money or resources expended to gain an object or service.

Ethical

Pertaining to morals, principles of right and wrong, and the conduct that is considered correct.

Short-term Investment

Investments that are made with the intention of converting them into cash within a short period, typically within a year.