Question: Several countries that have experienced hyperinflation adopt dollarization as a way to control domestic inflation. For example, Ecuador has used the U.S. dollar as its

Several countries that have experienced hyperinflation adopt dollarization as a way to control domestic inflation. For example, Ecuador has used the U.S. dollar as its domestic currency since 2000. What does dollarization imply about the exchange rate between Ecuador and the United States? Why might countries experiencing hyperinflation adopt dollarization? Why might they do this rather than just fixing their exchange rate?

Step by Step Solution

3.40 Rating (181 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Dollarization implies a country adopting dollar as its currenc... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

745-B-E-I-E (1000).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!