In the early 2000s, Ecuador replaced its currency, the sucre, with the U.S. dollar as its official currency. What would prompt a country to abandon its own currency and adopt the currency of the United States?
A. With dollars, monetary policy will be better able to offset shock to the economy.
B. In making the transition to dollars, corrupt government officials are able to amass tremendous fortunes.
C. Adopting the dollar will result in the elimination of U.S. tariffs on exports from Ecuador to the United States.
D. Adopting the dollar will bring inflation under control, which will aid economic growth.
Answer: D
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