Monetary union, in comparison to dollarization, means that:

Question

Quizplus · Accepted Answer

Monetary union involves multiple countries sharing a single currency and agreeing on common monetary policies, which means they share in the decision-making process. Dollarization, on the other hand, involves a country adopting a foreign currency (usually the US dollar) as its own, meaning it forfeits seignorage revenues and the ability to make independent monetary policy decisions. Option C is not a necessary consequence of a monetary union, as the central bank can still act as the lender of last resort under certain conditions.

Monetary Union, in Comparison to Dollarization, Means That