In early 2017, according to the Wall Street Journal, President Donald Trump said that the U.S. dollar was “getting too strong,” and the would prefer that the Federal Reserve “keep interest rates low.” The article also quoted the president as saying, “It’s very, very hard to compete when you have a strong dollar.”
a. What does President Trump mean by a “strong dollar”?
b. Is there an economic connection between the president’s desire for a weaker dollar and his desire that the Federal Reserve keep interest rates low? Briefly explain.
c. Why would a strong dollar make it hard for U.S. firms to compete?