Which of the Following Best Defines Dollarization

question 99

Multiple Choice

Which of the following best defines dollarization?

• A) A country uses the U.S. dollar as well as its currency for all transactions.
• B) A country adopts a foreign currency for all transactions basically eliminating its own monetary policy.
• C) A country eliminates its own currency for international transactions and requires that all international transactions be conducted in U.S. dollars.
• D) The central bank of a country agrees to exchange its own currency for U.S. dollars at a fixed exchange rate.

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