Thinks Dollar Is Too Strong, Blames Fed Policy." Source: Jeff
Mason, "Trump Thinks Dollar Is Too Strong, Blames Fed Policy:
Official," New York Times, June 25, 2019.
a. What does it mean to say the dollar is "too
strong"? Saying the dollar is "too strong" refers to the point of
view that
A. the dollar's exchange value relative to other currencies is
higher than what it should be.
B. the dollar's exchange value relative to other currencies is
lower than what it should be.
C. the dollar cannot buy as many goods and services as it
should.
D. interest rates are lower than what they should be.
b. Which groups in the United States gain and which
lose when the dollar is strong?
In the following table, identify which groups gain and
which groups lose as the result of a strong dollar.
Gain or Lose?
U.S. exporters of goods and services to other countries
U.S. consumers who purchase imported goods
Foreign consumers who purchase U.S.-produced goods
U.S. firms that import foreign intermediate goods
c. Briefly explain the connection between Fed policy
and the strength of the dollar.
When the Fed raises interest rates, it makes U.S. assets
( ) (less or
more) attractive to foreign investors. As
a result, foreign demand for U.S. dollars will
(decrease or increase), resulting in a
()lower higher exchange value of the dollar.
- A 2019 Article In The New York Times Was Headlined Trump Thinks Dollar Is Too Strong Blames Fed Policy Source 1 (79.79 KiB) Viewed 31 times