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

If the dollar's value is expected to strengthen, it means that each dollar can buy more goods and services, which puts downward pressure on prices. This makes it less likely for a stimulative monetary policy to cause inflation. Therefore, the Fed can use a stimulating monetary policy with least concern about causing inflation if the dollar's value is expected to strengthen.

The Fed May Use a Stimulative Monetary Policy with Least