Which of the Following Is One Consequence of Massive Chinese

question 12

Multiple Choice

Which of the following is one consequence of massive Chinese purchases of U.S. treasury bonds?

• A) It has reduced the values of the U.S. dollar.
• B) It has helped close the U.S. budget deficit.
• C) It has reduced America's trade deficit.
• D) It has reduced U.S. imports from China.

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Definitions:

Bond Liability

An obligation or debt represented by bonds issued by a company, which it is required to repay at a specified time with interest.

Effective Interest Method

An accounting technique used to allocate the interest expense or income of a bond over its life in a way that yields a constant rate of return.

Interest Expense

The cost incurred by an entity for borrowed funds, which is considered a non-operating expense on the income statement.