单选题
The United States economy made progress in reducing unemployment and moderating inflation. On the international side, this year was much calmer than last. Nevertheless, continuing imbalances in the pattern of world trade contributed to intermittent strains in the foreign exchange markets. These strains intensified to crisis proportions, precipitating a further devaluation of the dollar.
The domestic economy expanded in a remarkably vigorous and steady fashion. The resurgence in consumer confidence was reflected in the higher proportion of incomes spent for goods and services and the marked increase in consumer willingness to take on installment debt. A parallel strengthening in business psychology was manifested in stepped-up rate of plant and equipment spending and a gradual pickup in outlays for inventory. Confidence in the economy was also reflected in the strength of the stock market and in the stability of the bond market. For the year as a whole, consumer and business sentiment benefited from rising public expectations that a resolution of the conflict in Vietnam was in prospect and that East-West tensions were easing.
The underpinnings of the business expansion were to be found in part in the stimulative monetary and fiscal policies that had been pursued. Moreover, the restoration of sounder liquidity positions and tighter management control of production efficiency had also helped lay the groundwork for a strong expansion. In addition, the economic policy moves made by the President had served to renew optimism on the business outlook while boosting hopes that inflation would be brought under more effective control.
Finally, of course, the economy was able to grow as vigorously as it did because sufficient flexibility existed in terms of idle men and machines.
The United States balance of payments deficit declined sharply. Nevertheless, by any other test, the deficit remained very large, and there was actually a substantial deterioration in our trade account to a sizable deficit, almost two thirds of which was with Japan. While the overall trade performance proved disappointing, there are still good reasons for expecting the delayed impact of devaluation to produce in time a significant strengthening in our trade picture. Given the size of the Japanese component of our trade measures undertaken by Japan. Also important will be our own efforts in the United States to fashion internal policies consistent with an improvement in our external balance.