Question

Which of the following are reasons that the U.S. would have a strong currency abroad? Select all that apply.

U.S. companies buy cheaply made goods from abroad at a great price.
There is generally only a slight annual rise in inflation.
The Democrats are in power.
The monetary policy of the US is stable.
Interest rates are high.

Answer 1

The correct answers are: There is generally only a slight annual rise in inflation.
The monetary policy of the US is stable. Interest rates are high. A slight rise in inflation implies a tight fiscal discipline and monetary policy that promote a strong currency. High interest rates promote a strong currency by attracting foreign investors.

Answer 2

: The correct answers are: There is generally only a slight annual rise in inflation.

The monetary policy of the US is stable. Interest rates are high. A slight rise in inflation implies a tight fiscal discipline and monetary policy that promote a strong currency. High interest rates promote a strong currency by attracting foreign investors.