1. Maintaining a strong dollar in international currency markets in order to boo
ID: 1162422 • Letter: 1
Question
1. Maintaining a strong dollar in international currency markets in order to boost American exports is a high priority policy for the Federal Reserve. True or False?
2. Dollar bills, debit cards, and cryptocurrency serve as money because
people believe others will accept them as money.
they have value as a commodity independent of their use as money.
they can be redeemed for gold by a central bank or federal government.
their exchange value is backed by credible legal institutions.
A.people believe others will accept them as money.
B.they have value as a commodity independent of their use as money.
C.they can be redeemed for gold by a central bank or federal government.
D.their exchange value is backed by credible legal institutions.
Explanation / Answer
a) "False"
A strong dollars will negatively affect the export and will not promote it. To increase the exports in the market the Fed need to weaken the dollar, it will make the local goods cheaper and make them more competitive in the market-boosting exports.
b) "A"
Cryptocurrency is not backed by legal institutions, we cannot redeem gold for just debit card, in fact, it doesn't have any value of its own and currency doesn't have any commodity value of its own its just paper. The answer is "A", people believe others will accept them as money.
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