To help insulate their economies from inflation,currency depreciation,and capital flight,developing countries have implemented:
A) Regional trading blocs
B) Currency boards
C) Central banks
D) Regional fiscal policies

Question

Quizplus · Accepted Answer

Currency boards are a commonly used tool by developing countries to insulate their economies. Currency boards are an institution that fixes the exchange rate of a country's currency to a foreign currency, usually the U.S. dollar or euro, and then fully backs the domestic currency with foreign reserves. Currency boards limit the money supply and prevent the government from printing more money than they have foreign reserves for, helping to prevent inflation. Additionally, by pegging to a foreign currency, currency boards provide stability and help prevent depreciation. Finally, since the currency is backed by foreign reserves, it is less likely to experience capital flight.

To Help Insulate Their Economies from Inflation,currency Depreciation,and Capital Flight,developing