- #1
Bipolarity
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Suppose the U.S government decides to drastically reduce the required liquidity ratio for banks, causing the money supply to skyrocket and interest rates to plunge. How will this affect the value of the dollar in terms of other currencies, assuming that all other things remain constant (in both the US and around the world) ?
My blunt guess is that money supply and strength of currency are inversely proportional, but I would also imagine that speculators can somehow restabilize the value of the currency even if the money supply is changed.
BiP
My blunt guess is that money supply and strength of currency are inversely proportional, but I would also imagine that speculators can somehow restabilize the value of the currency even if the money supply is changed.
BiP