An Example of a Deficit Item on the U

question 26

Multiple Choice

An example of a deficit item on the U.S. balance of payments is

• A) the sale of a carburetor made in Michigan to a Honda plant in Ohio.
• B) a deposit in a bank in New York by a British firm.
• C) a U.S. resident flies from New York to Rome on British Airways.
• D) the payment of a dividend from a Canadian firm to an American living in Maine.

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Definitions:

System 1

A term often used in psychology and behavioral economics, referring to the brain's fast, automatic, and intuitive approach to decision-making.

Rational Behavior

Human behavior based on comparison of marginal costs and marginal benefits; behavior designed to maximize total utility.

System 2

A term often used in psychology to refer to the deliberate, effortful, and analytical mode of thinking, contrasted with fast, automatic System 1 thinking.

Detrimental Behaviors

Actions or habits that are harmful or disadvantageous to oneself or others.