Compared to dollarization,a currency board
A) has a flexible exchange rate.
B) has a separate currency.
C) conducts independent monetary policy.
D) is the same institution.

Question

Quizplus · Accepted Answer

A currency board has a separate currency, while dollarization involves using the US dollar as the official currency, replacing the domestic currency. A currency board pegs the value of the domestic currency to another currency, typically the US dollar, and holds foreign reserves to back the currency in circulation. However, a currency board does not conduct independent monetary policy and typically maintains a fixed exchange rate with the pegged currency.

Compared to Dollarization,a Currency Board