er (Kandil, 2002).
Thus, the Federal Reserve is confronted with the problem of providing additional capital. The Federal Reserve could just print more money (a euphemism for various policies that increase the supply of money in the economy beyond the point where the strength of the economy can support the additional money). Most everyone recognizes that printing money is a bad idea that, over some period of time, will lead to stunning inflation followed by an even more stunning economic crash. The answer for the Federal Reserve, thus, is to attract more money into the United States from other countries. The increase in foreign money in the American economy will ease the pressure on the American capital markets (Rhee, 2003). Then, the federal government can fund its budget deficit, American businesses can obtain investment funds, American consumers can buy houses and cars, and no one will have to pay higher tax bills.
To accomplish the objective of attracting more foreign money into the American economy, the Federal Reserve implements policies that make the American economy more attractive to foreign inv
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