An expansionary monetary policy tends to ___ the U.S.dollar relative to foreign currencies and to ____ our balance of trade.

Question

Quizplus · Accepted Answer

An expansionary monetary policy typically involves lowering interest rates to stimulate economic growth. Lower interest rates can lead to a depreciation of the domestic currency (in this case, the U.S. dollar) relative to foreign currencies. This depreciation makes domestic goods cheaper for foreign buyers, potentially improving the balance of trade by increasing exports.

An Expansionary Monetary Policy Tends to ___ the U