Which of the Following Is a Deficit Item on the U.S

question 240

Multiple Choice

Which of the following is a deficit item on the U.S. balance of payments accounts?

• A)A U.S. firm sells a product to a Mexican firm.
• B)An Italian tourist in Miami purchases a beach ball.
• C)A Spaniard buys 100 shares of Ford stock.
• D)A U.S. resident buys gold from the Japanese central bank.

---

Definitions:

Output Effect

The possibility that when the price of the first of a pair of substitute resources falls, the quantity demanded of both resources will increase.

Present Consumption

The use of goods and services for immediate satisfaction or needs, as opposed to saving for future use.

Loanable Funds

The supply of available capital in the financial markets for borrowing, which can be used for investment purposes by individuals and businesses.

Future Consumption

The use of goods or services at a later date, often facilitated by saving or investing in the present.