Which of the following statement is correct? Select one: a. With the dollarizati

Question

Which of the following statement is correct?

Select one:

a. With the dollarization, the government has full control over monetary policy and the central bank acts as a lender of last resort to banks and other institutions.

b. Exchange rates also are never affected by expectations of future currency changes, which depend on forecasts of future economic and political conditions.

c. Primarily market forces determine a floating currency's value.

d. All the answers are incorrect.

e. By selling dollars and buying euros, the Fed may raise the value of the dollar.

Explanation / Answer

Answer:

Option D is the answer

Reason:

By selling dollars and buying euros, the Fed may decreses the value of the dollar. And Exchange rates are affected by expectations of future currency changes, which depend on forecasts of future economic and political conditions. And in case of  dollarization, the government may or may not has the full control over monetary policy. And the floating currency's value is determined by demand and supply.

So all the options are false

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