Question
a. What are the main differences between the following currency regimes: Free Floating versus Pegged Currencies and dollarization? b. What are the intermediate currency arrangements
a. What are the main differences between the following currency regimes: Free Floating versus Pegged Currencies and dollarization?
b. What are the intermediate currency arrangements and their purpose? Hint: the answer can be inferred from the next 2 questions.
c. Which of the two polar regimes in part a. allows the economy to exercise "monetary sovereignty", i.e., allowing the government (through a central bank) to use monetary policy to stabilize the economy in case of an economic or financial crisis, and of the regimes denies the government this role?
d. Which of these regimes allows the government to use fiscal policies to for economic stabilization purposes?
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