Which of the Following Would Be Included in the Financial

question 48

Multiple Choice

Which of the following would be included in the financial account of the U.S. balance of payments?

• A) The U.S. government's foreign aid
• B) The purchase of a stock in a U.S. corporation by a foreigner
• C) The purchase of a Japanese computer by a U.S. corporation
• D) The purchase of a plane ticket from Australian Airlines by a U.S. resident
• E) The purchase of a German car by a U.S. resident

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Definitions:

Income Elasticity

measures how much the quantity demanded of a good changes in response to a change in consumers' income.

Midpoint Method

A technique used in economics to calculate the percentage change between two values, averaging the initial and final values to estimate elasticity.

Normal Good

A good for which demand increases as the income of the consumer increases, holding all else constant.

Production Capacity

The maximum output that a business can produce in a given period under normal conditions.