You have been hired as a consultant to the central bank for a country that has for many years suffered from repeated currency crises and depends heavily on the U.S. financial and product markets. Which of the following policies would have the greatest effectiveness for reducing currency volatility of the client country with the United States?

Question

Quizplus · Accepted Answer

Dollarization eliminates exchange rate risk with the U.S. dollar by adopting it as the official currency, thus reducing currency volatility with the U.S.

You Have Been Hired as a Consultant to the Central