In the early 1980s, the Federal Reserve pursued a tight monetary policy.All else being equal, the impact of that policy was to ____ interest rates in the United States relative to those in Europe and cause the dollar to ____ against European currencies.

Question

Quizplus · Accepted Answer

A tight monetary policy typically leads to higher interest rates to curb inflation, which in turn can make a currency more attractive to foreign investors, leading to an appreciation of the currency.

In the Early 1980s, the Federal Reserve Pursued a Tight