Trends in Dollar In class, we discussed reasons why the dollar and GDP, as shown on slide 9, are inversely correlated. Which of the following is FALSE based on those discussions? If you have time after you finish the quiz, you may want to read this article by the Fede on the trade gap and the dollar. It expands on what we discussed in class and has the same conclusion When the economy strengthens, inflation tends to rise which erodes the value of the dollar The dollar is considered a very risky asset, so it rises in value when the economy strengthens When the economy strengthens, the trade gap tends to widen and this pushes down the dollar