In the early 2000s, Ecuador replaced its currency, the sucre, with the U.S.dollar as its official currency to solve its inflation problem.As long as Ecuador maintains the U.S.dollar as its official currency, what will happen to the monetary policy of Ecuador?
A)it will become both more powerful and more flexible
B)it will become more powerful but less flexible
C)it will become less powerful but more flexible
D)it effectively will cease to exist

Question

Quizplus · Accepted Answer

By adopting the U.S. dollar, Ecuador relinquished control over its own monetary policy, as it no longer has the ability to issue its own currency or adjust interest rates independently.

In the Early 2000s, Ecuador Replaced Its Currency, the Sucre