Policy makers can select from a number of different exchange rate regimes and exchange rate policies.Which of the following policies would most likely represent a hard peg?
A)a revaluation
B)a devaluation
C)a flexible exchange rate regime
D)a dollarization

Question

Quizplus · Accepted Answer

Dollarization is a monetary policy where a country adopts a foreign currency, usually the US dollar, as its official currency and completely gives up its own currency. This represents a hard peg as the country's exchange rate is fixed at a rate of 1:1 with the US dollar.

Policy Makers Can Select from a Number of Different Exchange