It has been argued that the exchange rate can be used as a policy tool. Assume that the U.S. government would like to reduce unemployment. Which of the following is an appropriate action given this scenario?

Question

Quizplus · Accepted Answer

By weakening the dollar, U.S. exports become cheaper and imports become more expensive, which can lead to an increase in demand for U.S. goods and services. This will, in turn, increase production and create jobs, reducing unemployment.

It Has Been Argued That the Exchange Rate Can Be