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.
(c)
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In the mid-1990s, cattle ranchers in the United States kept raising cattle even though prices were at a ten-year low and below average total cost. What is the likely explanation for this?
A) The ranchers were hoping to receive government subsidies. B) The exit costs were too high. C) Continuing to operate resulted in smaller losses than would have been incurred by shutting down. D) Cattle is an important source of protein and its production is essential for the United States.
Traders working for banks are subject to the
A) principal-agent problem. B) free-rider problem. C) double-jeopardy problem. D) exchange-risk problem.