Even with persistent trade deficits,the value of the U.S.dollar continued to rise into the mid-2000s primarily due to
A) strong dollar policies of the U.S. Treasury.
B) falling U.S. fiscal deficits.
C) economic growth in the U.S..
D) expansionary U.S. monetary policy.

Question

Quizplus · Accepted Answer

The value of the U.S. dollar continued to rise into the mid-2000s primarily due to economic growth in the U.S. This increased confidence in the U.S. economy and attracted foreign investment, which increased the demand for the U.S. dollar and thus its value. While strong dollar policies and falling fiscal deficits may have had some impact on the value of the dollar, they were not the primary drivers. Expansionary monetary policy, which typically involves increasing the money supply and lowering interest rates, can actually lead to a weakening of the dollar, so it is unlikely to have contributed to the dollar's rise.

Even with Persistent Trade Deficits,the Value of the U