Because many emerging market countries have not developed the political or monetary institutions that allow the successful use of discretionary monetary policy, ________.

Question

Quizplus · Accepted Answer

Emerging market countries often lack the necessary political and monetary institutions to effectively use discretionary monetary policy. This makes it difficult for them to benefit from an independent monetary policy, but also puts them at risk of negative consequences. Using a nominal anchor or pegging their exchange rate to a stable currency like the U.S. dollar may help these countries avoid economic instability and inflation.

Because Many Emerging Market Countries Have Not Developed the Political