WorldCo, a Foreign Corporation Not Engaged in a U

question 111

Multiple Choice

WorldCo, a foreign corporation not engaged in a U.S. trade or business, receives $50,000 in interest income from deposits with the foreign branch of a U.S. bank. The U.S. bank earns 78% of its income from foreign sources. How much of WorldCo's interest income is U.S. source?

• A) $0
• B) $11,000
• C) $39,000
• D) $50,000

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Definitions:

National Income

The total amount of money earned within a country from production and services over a specific time period.

Opportunity Cost

Dismissing potential benefits from other possible choices by focusing on one.

Scarce Resources

Natural or human resources that are limited in supply and cannot fulfill all wants and needs due to their finite availability.

Free Lunch

An idiom expressing the idea that it is impossible to get something for nothing; in economics, it refers to the impossibility of getting a benefit without a cost.