In the Context of Foreign Exchange Rates, Which of the Following

question 13

Multiple Choice

In the context of foreign exchange rates, which of the following scenarios exemplifies dollarization?

• A) The country of Zansas pegs its currency, the Zan, to the U.S. dollar at 5.75 Zan per dollar.
• B) Melton, a country facing serious crisis, uses the currency of Alarodo as legal tender for conducting transactions.
• C) Pereraus, a developing country, mandates the use of electronic currencies that can be monitored by distributed peer networks for all trading purposes.
• D) The country of Denbarrow bases its currency on the gold standard such that the value of the currency can be determined by the ability to trade it for a specified amount of gold.

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Definitions:

Total Revenue

The total income a business receives from selling its goods or services, calculated as the quantity sold multiplied by the price.

Midpoint Formula

In economics, it is often used to calculate the price elasticity of demand by comparing the percentage change in quantity demanded to the percentage change in price.

Price Elasticity

An index of how sensitive the amount of a product that is bought or sold is to variations in its cost.

Total Revenue

The overall amount of money generated by the sale of goods or services before any costs are subtracted.