Suppose that the U.S. Federal Reserve wishes to influence the value of the dollar to decrease inflation.

If the Fed uses direct intervention to achieve this goal, it will seek to strengthen/weaken the dollar. In doing so, this direct intervention may very well increase/decreaseunemployment since demand for domestically produced goods may increase/decrease.

Answer rating: 100% (QA)

If the US Federal Reserve wishes to decrease inflation by influencing the value of the dollar it would seek to weaken the dollar through direct interv... View the full answer