Question:
Despite substantial weakness in the US economy and the turmoil in credit markets, the US Dollar has increased substantially in value against the Euro since last summer, (although since mid March it has given back some of those gains as recent data has suggested that the US economy's decline is slowing and growth in RGDP may resume later this year.) Given the current condition of the US economy, do you think US policy makers would prefer to see the $ rise in value, decline in value or stay at its current value? Discuss the advantages and disadvantages of a stronger/weaker $.