Which of the following is NOT an argument against dollarization?
A) Dollarization causes a loss of sovereignty over domestic monetary policy.
B) Dollarization removes currency volatility against the dollar.
C) Dollarization causes the country to lose the power of seignorage.
D) The central bank of the dollarized country loses the role of lender of last resort.

Question

Quizplus · Accepted Answer

The argument in favor of dollarization is that it removes currency volatility against the dollar, so this cannot be an argument against it. A, C, and D are all common arguments against dollarization.

Which of the Following Is NOT an Argument Against Dollarization