The foreign holdings of U.S. dollars
a. reduce the living standards of Americans.
b. are not included in the M1 money supply.
c. account for approximately half of all U.S. currency issued by the Fed.
d. are hard to explain since the dollar is not legal tender outside the United States.
C
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Every six weeks, the Federal Open Market Committee (FOMC) meets to discuss how to best adjust ________ to accommodate shocks that shift the level of ________
A) the equilibrium real interest rate; the target Fed Funds rate B) the target Fed Funds rate; the equilibrium real interest rate C) the 3 month T-bill rate; the inflation gap D) target rate of inflation; money demand E) none of the above
In implementing the Marshall Plan (1948–51),
(a) the United States discouraged European countries from cooperating among themselves to increase trade, as it was felt that economic recovery would be better achieved through competition. (b) the United States, in order to offset the large capital outflow caused by loans and grants made abroad, tried to maintain a balance of payments surplus. (c) the United States offered financial aid to many of the economies in Western Europe devastated by World War II. (d) the U.S. dollar was devalued 30% against other world currencies.