Which of the Following Does a Nation Sacrifice When Dollarization

question 2

Multiple Choice

Which of the following does a nation sacrifice when dollarization takes place?

• A)conducting its own monetary policy
• B)acting as a lender of last resort
• C)collecting seigniorage from independently issuing its own currency
• D)all of the above

---

Definitions:

Unusually Risky

Describes investments or actions that carry a higher than normal level of risk, often due to uncertain outcomes or volatile conditions.

IRRs

The Internal Rate of Return is a measurement used in the process of capital budgeting to assess the potential profitability of investments.

Cost of Capital

The rate of return a company must earn on its investment projects to maintain its market value and satisfy its shareholders and creditors.

Capital Budgeting

The approach taken by a business to appraise potential key projects or investments.