If Janet Yellen,Chair of the Federal Reserve Board,begins to Tighten

question 6

Multiple Choice

If Janet Yellen,Chair of the Federal Reserve Board,begins to tighten monetary policy by raising US interest rates next year,what is the likely impact on the value of the dollar?

• A) The value of the dollar falls when US interest rates rise.
• B) The value of the dollar rises when US interest rates rise.
• C) The value of the dollar is not related to US interest rates.
• D) This is known as Purchasing Power Parity or PPP.
• E) The Federal Reserve has no impact at all on interest rates.

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