Dollarization by a foreign country is another form of:
A)balancing a country's current account.
B)maintaining monetary policy independence.
C)fixing an exchange rate.
D)maintaining a balanced government budget.

Question

Quizplus · Accepted Answer

Dollarization, where a country adopts another country's currency (often the US dollar), is essentially a method of fixing the exchange rate between the domestic currency (if it still exists) and the foreign currency. This eliminates exchange rate fluctuations with the adopted currency.

Dollarization by a Foreign Country Is Another Form Of