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In 2004, Ecuador replaced its currency, the sucre, with the U.S. dollar as its official currency. The hope was that this would end record inflation running at 104 percent a year. This action prevented the government from printing excessive money to meet its budgetary needs.. As long as Ecuador maintains the U.S. dollar as its official currency, what will happen to the monetary policy of Ecuador? A. It will become both more powerful and more flexible. B. It will become more powerful but less flexible. C. It will become less powerful but more flexible ( incorrect) D. It effectively will cease to exist.

In 2004, Ecuador replaced its currency, the sucre, with the U.S. dollar as its official currency. The hope was that this would end record inflation running at 104 percent a year. This action prevented the government from printing excessive money to meet its budgetary needs.. As long as Ecuador maintains the U.S. dollar as its official currency, what will happen to the monetary policy of Ecuador? A. It will become both more powerful and more flexible. B. It will become more powerful but less flexible. C. It will become less powerful but more flexible ( incorrect) D. It effectively will cease to exist.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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In 2004, Ecuador replaced its currency, the sucre, with the U.S. dollar as its official currency. The hope was that this would end record inflation running at 104 percent a year. This action prevented the government from printing excessive money to meet its budgetary needs.. As long as Ecuador maintains the U.S. dollar as its official currency, what will happen to the monetary policy of Ecuador? A. It will become both more powerful and more flexible. B. It will become more powerful but less flexible. C. It will become less powerful but more flexible ( incorrect) D. It effectively will cease to exist.
Transcribed Image Text:In 2004, Ecuador replaced its currency, the sucre, with the U.S. dollar as its official currency. The hope was that this would end record inflation running at 104 percent a year. This action prevented the government from printing excessive money to meet its budgetary needs.. As long as Ecuador maintains the U.S. dollar as its official currency, what will happen to the monetary policy of Ecuador? A. It will become both more powerful and more flexible. B. It will become more powerful but less flexible. C. It will become less powerful but more flexible ( incorrect) D. It effectively will cease to exist.
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