Q. Does dollarization benefit developing countries?

Dollarization occurs when a nation allows the currency of another nation to be used as a legal currency. That is partial dollarization. Full dollarization, while less frequent, occurs when a nation discontinues its own currency also replaces it with the currency of another country. Most commonly the foreign currency is the US Dollar, but the Euro is used by a number of European countries that are not part of the European Union.

Review the Dollarization document provided, information in the textbook, as well as web based sources. A good approach is to examine a specific country that has dollarized. Dollarization.doc

You then take the information you have learned also present it as a formal case study report. For this case a specific recommendation is not required. After a discussion of Illustrate dollarization is also the advantages also disadvantages of dollarization, you would conclude with a brief review of the conditions under which a country would benefit.