El Salvador has dollarized; that is, it uses the U.S. dollar as its currency. What is the backing ratio for El Salvador's currency?
A) 0%
B) 25%
C) 75%
D) 100%

Question

Quizplus · Accepted Answer

Since El Salvador has dollarized and uses the U.S. dollar as its currency, the backing ratio for its currency is 100%. This means that for every Salvadoran dollar in circulation, there is a corresponding U.S. dollar held in reserve by the country's central bank.

El Salvador Has Dollarized; That Is, It Uses the U