In the short run,a tighter monetary policy by the U.S.Federal Reserve leads to:

Question

Quizplus · Accepted Answer

In the short run, a tighter monetary policy by the Federal Reserve leads to a decrease in the supply of dollars through actions such as increasing interest rates or reducing the money supply. This reduction in supply, coupled with the same level of demand, leads to a higher value of the dollar in the foreign exchange market or a dollar appreciation.

In the Short Run,a Tighter Monetary Policy by the U