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Case: The U.S. central bank, the Federal Reserve, has been raising the federal funds rate by three percentage points (0.25% to 3.25%) for some time now. Please explain the following two questions in detail~
(i) Why the Fed implemented a tightening monetary policy(ii) How tightening monetary policy affects the AUD/USD exchange rate.
I hope you can meet the following points, thank you very much!
Question 1. You need to describe the exchange rate movement over the past six months.
Question 2. You need to use intermediate macroeconomics knowledge.
Question 3. If necessary, you can use equations or graphs.
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