A change in Fed policy from "tight money" to "easy money" puts ________ pressure on the interest rate and thus tends to cause ________ of the dollar.

Question

Quizplus · Accepted Answer

When the Fed shifts from "tight money" to "easy money", there is increased supply of money, which causes the interest rates to go down. As a result, investors tend to move their investments to other countries that offer higher interest rates, which will result in the depreciation of the dollar.

A Change in Fed Policy from "Tight Money" to "Easy