In January 2000 Ecuador Officially Replaced Its National Currency, the Ecuadorian

question 57

Multiple Choice

In January 2000 Ecuador officially replaced its national currency, the Ecuadorian sucre, with the U.S. dollar. This practice is known as:

• A) bi-currencyism.
• B) securitization
• C) a Yankee bailout.
• D) dollarization.

---

Definitions:

Revealed Preference

A theory that assumes individuals' preferences can be determined by their purchasing habits.

Weak Axiom

A principle in consumer choice theory stating that if a consumer prefers bundle A over bundle B when both are available at the same prices, then the consumer will not purchase more of bundle B if its price rises.

Revealed Preference

An economic theory stating that the preferences of consumers can be understood by their purchasing habits.

Prices

The monetary value assigned to goods and services in a market, dictating the exchange rate at which these can be traded.