What is dollarization? ?Pegging the value of a domestic currency against the mar

ID: 2824249 • Letter: W

Question

What is dollarization?

?Pegging the value of a domestic currency against the market value of gold.

?Pegging the value of a foreign currency against the U.S. dollar.

?Using the dollar or some other foreign currency together with or instead of a domestic currency.

?Increasing the price of goods based on the supply of money.

?Maintaining an acceptable exchange rate based on government intervention.

?Pegging the value of a domestic currency against the market value of gold.

?Pegging the value of a foreign currency against the U.S. dollar.

?Using the dollar or some other foreign currency together with or instead of a domestic currency.

?Increasing the price of goods based on the supply of money.

?Maintaining an acceptable exchange rate based on government intervention.

Answer : " b. Pegging the value of a foreign currency against the U.S. dollar. "

=> Dollarization is use of dollar as the recognised foreign currency officially for foreign currency.

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