To help insulate their economies from inflation, currency depreciation, and capital flight, developing countries have implemented
A) regional trading blocs.
B) currency boards.
C) central banks.
D) regional fiscal policies.

Question

Quizplus · Accepted Answer

Developing countries have implemented currency boards to help insulate their economies from inflation, currency depreciation, and capital flight. Currency boards are institutions that issue a domestic currency backed by a foreign reserve currency. The domestic currency is pegged at a fixed exchange rate to the foreign reserve currency. This provides stability to the domestic currency and helps prevent inflation and currency depreciation.

To Help Insulate Their Economies from Inflation, Currency Depreciation, and Capital