The Fed may use a stimulative monetary policy with least concern about causing inflation if the dollar's value is expected to:

Question

Quizplus · Accepted Answer

A strengthening dollar typically leads to lower inflation as imports become cheaper and it becomes harder for firms to raise prices without losing market share. Therefore, the Fed can use a stimulative monetary policy without worrying as much about inflation in this scenario.

The Fed May Use a Stimulative Monetary Policy with Least