Which of the Following Is NOT an Argument Against Dollarization

question 8

Multiple Choice

Which of the following is NOT an argument against dollarization?

• A) The dollarized country's central bank can no longer act as a lender of last resort.
• B) The dollarized country can no longer profit from seignorage (the ability to profit from the creation of money within its economy).
• C) The dollarized country losses sovereignty over its own monetary policy.
• D) All of the above are arguments against dollarization from the viewpoint of the affected country.

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Definitions:

Import

The act of bringing goods or services into one country from another for the purpose of sale.

Compasses

Instruments used for navigation and orientation that show direction relative to the geographic cardinal directions (North, South, East, and West).

Absolute Advantage

The ability of an individual, company, or country to produce a good or service more efficiently than others with the same resources.

Gain From Trade

The benefit that arises from efficient allocation of resources, allowing parties involved to obtain goods or services they desire at a lower opportunity cost.