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How can you avoid the weakening dollar due to its depreciation as a result of inflation by weakening the economy by raising interest rates? Based on the view of Milton Friedman.

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View of Milton Friedman is explained in a structured manner in this response. The answer includes references used.

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The weakening of the dollar is not just because of inflation. There are several factors that contribute to its weakening. It is the result of government decisions relating to generating jobs, raising the debt limit, the budget deficit and the growth of the federal government's long term debt. The dollar has also been affected by the monetary policy decisions. The exchange rate of the dollar is determined by the supply of and demand for dollars in the international market.

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Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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