For Ecuador, an advantage of adopting the dollar as its official currency is that
A) the Federal Reserve becomes Ecuador's lender of last resort.
B) Ecuador escapes the likelihood of a speculative attack.
C) Ecuador's government can capture revenue by issuing currency (called seigniorage).
D) Eduador's monetary policy becomes independent from that of the Federal Reserve.

Question

Quizplus · Accepted Answer

Adopting the dollar helps Ecuador avoid speculative attacks on its currency because it eliminates the risk associated with potential devaluation of a local currency, thus stabilizing the economy.

For Ecuador, an Advantage of Adopting the Dollar as Its