For developing countries,currency boards and dollarization are intended to
A) convince speculators that the exchange rate is unchangeable
B) promote confidence in the soundness of the nation's money supply
C) arrest any tendencies in an economy toward inflation
D) all of the above

Question

Quizplus · Accepted Answer

Currency boards and dollarization are both intended to address issues related to exchange rate stability, confidence in the money supply, and inflation. By pegging the local currency to a more stable currency such as the US dollar, these systems aim to reduce the volatility of the exchange rate and provide greater assurance to investors and consumers. Additionally, by limiting the ability to print local currency, these systems can help prevent inflationary pressures from building up in the economy. Therefore, all of the options listed in the answer are correct.

For Developing Countries,currency Boards and Dollarization Are Intended to