Question

Which one of the following is​ true? A. Most of the U.S. currency in existence circulates outside U.S. borders. B. ​Traveler's checks are not considered to be money because they are not valid unless signed. C. Balances in money market deposit accounts are counted in M1 but are not included in M2. D. Transaction deposits are counted in M2 but are not included in M1.

Answer 1

Answer:

A) Most of the U.S. currency in existence circulates outside U.S. borders.

Explanation:

Both the Secretary of the Treasury and the Federal Reserve estimate that around 60% of all US dollar bills are held in foreign countries.

The US dollar is considered the strongest and most stable currency in the world. That is the reason why so many governments use the US dollar as a reserve of value. Some foreign countries even adopted the US dollar as their own currency, e.g. El Salvador, Ecuador, Guam, Zimbabwe, etc.