The dramatic rise in the dollar between 1981 and 1986 was the result of a(n)

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A tight monetary policy results in higher interest rates, which attracts foreign investors to invest in the country's currency, causing an appreciation in the value of the currency. An expansive fiscal policy, which involves increased government spending and decreased taxes, would typically result in inflation, decreasing the value of the currency. Therefore, a tight monetary and expansive fiscal policy would be contradictory and unlikely to result in a strong currency. The rise in the dollar between 1981 and 1986 was primarily driven by the tight monetary policy implemented by the Federal Reserve under Chairman Paul Volcker, which raised interest rates to combat inflation.

The Dramatic Rise in the Dollar Between 1981 and 1986