Dollarization occurs when
A) the Federal Reserve finances a federal budget deficit by buying newly issued Treasury bonds in order to prevent interest rates from rising
B) a country adopts the US dollar as its legal tender
C) foreign currency boards target the US dollar
D) US importers reprice items in dollar terms
E) The IMF or a central bank sells reserves of US dollars on the world market to alter exchange rates

Question

Quizplus · Accepted Answer

Dollarization occurs when a country adopts the US dollar as its legal tender, meaning their economy will no longer have their own independent currency and instead they will use and transact with the US dollar.

Dollarization Occurs When