The world is coming to the dollar rescue - or is it self interest?
The Wall Street Journal reports that the World Tries to Buck Up Dollar as Thailand, Korea, Russia Seen Buying U.S. Currency; Pressure on China to Boost Yuan
SUMMARY: Governments stepped up efforts to stem the dollar's slide amid increasing concern about the impact of its weakness on their economic recoveries.
QUESTIONS (from the Journal-in-Education program):
1. What determines the value of the dollar on foreign exchange markets?
2. What accounts for the recent slide in the value of the dollar?
3. What are the economic consequences of the depreciating dollar?
4. What can the government do, if anything, to mitigate the fall in the value of the dollar?
5. What are the implications of the depreciation of the dollar on monetary policy? Does the
fall in the value of the dollar affect the Fed's ability to achieve it's goals?