If Mexico fully dollarizes its economy,it agrees to
A) Print pesos only to finance deficits of its national government
B) Use the U.S.dollar alongside its peso to finance transactions
C) Have the U.S.Treasury be in charge of its tax collections
D) Replace pesos with U.S.dollars in its economy

Question

Quizplus · Accepted Answer

Fully dollarizing the economy means replacing the national currency, the peso, with the U.S. dollar as the official currency of Mexico. This would eliminate the need to print pesos to finance deficits, as all transactions would be conducted in U.S. dollars. There would be no need for the U.S. Treasury to be in charge of tax collections, as Mexico would still be responsible for its own tax system under a dollarized economy.

If Mexico Fully Dollarizes Its Economy,it Agrees to