Which among the following is a correct definition of Dollarization?
[A] when the inhabitants of a country use US dollars in parallel to or instead of the domestic currency
[B] when the inhabitants of a country use only US Dollars instead of a domestic currency
[C] when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency
[D] None of the above
[B] when the inhabitants of a country use only US Dollars instead of a domestic currency
[C] when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency
[D] None of the above
Correct Answer: C [when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency]
Explanation:
when the inhabitants of a country use foreign currency in parallel to or instead of the domestic currency, The term is not only applied to usage of the United States dollar, but generally to the use of any foreign currency as the national currency.
