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4) What happens to the value of the dollar if the European Central Bank (ECB) tightens...

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Finance

4) What happens to the value of the dollar if the EuropeanCentral Bank (ECB) tightens its money supply and raises interestrates? How will this impact the value of the dollar, exports andimports, AD and GDP?

5) What are 5 financial innovations and deregulations that ledto the financial crisis in 2008? What are 5 policy responses by theFederal Reserve and the U.S. Government and Treasury departmentthat helped us to get out of the financial crisis? Who are thewinners and losers?

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4.4 Ratings (790 Votes)
4 The increases in interest rates and tightening of the supply will make Euro more attractive and will lead to appreciation of the currency in respect to dollars It will attract the foreign investors as well So in such a case euro will again against Dollars and the imports will become cheaper where as the exports will become comparatively less attractive The GDP tends to grow in nominal terms more than in real terms It is a good scenario    See Answer
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4) What happens to the value of the dollar if the EuropeanCentral Bank (ECB) tightens its money supply and raises interestrates? How will this impact the value of the dollar, exports andimports, AD and GDP?5) What are 5 financial innovations and deregulations that ledto the financial crisis in 2008? What are 5 policy responses by theFederal Reserve and the U.S. Government and Treasury departmentthat helped us to get out of the financial crisis? Who are thewinners and losers?

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