Prior to 2009, Zimbabwe experienced several years of declining real GDP. According to an article in the Wall Street Journal, “After Zimbabwe abandoned its currency in favor of the greenback, the economy grew at an annual rate of 6% in 2009 and 9% in 2010.”

a. Why would Zimbabwe abandon its own currency to begin using U.S. dollars (“greenbacks”)?

b. Why would using the U.S. dollar as its currency have enabled the economy of Zimbabwe to resume growing?

c. What potential problems could using U.S. dollars rather than its own currency pose for the Zimbabwean government?