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Author Question: What is dollarization and how has it recently affected the economy of specific Latin American ... (Read 53 times)

dbose

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on: Jul 14, 2018
What is dollarization and how has it recently affected the economy of specific Latin American countries? Also, what are preventive measures that some of these countries are taking to avoid problems associated with this phenomenon?
 
  What will be an ideal response?

Question 2

Will agricultural exports continue to be important for Caribbean economies in the 21st century? What are the environmental consequences of agricultural production in this tropical region?
 
  What will be an ideal response?


Sweetkitty24130

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Reply #1 on: Jul 14, 2018
Answer to Question 1

Because of previous experiences with hyperinflation, several countries of Latin America have pegged the value of their currency to the dollar. This helps to reduce inflation, eliminate fears of currency devaluation, and reduce the cost of trade by eliminating currency conversion costs. This policy is often unpopular with voters and does not allow a country full control over its monetary policy.

Answer to Question 2

For some countries and territories, agricultural exports will remain important. However, global economic fluctuations and competition from other exportersespecially those in Latin Americawill limit this as an economic strategy. The environmental consequences will continue to be deforestation, soil exhaustion, and soil loss/erosion.


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