Which of the Following Transactions Would Be Recorded as a Debit

question 39

Multiple Choice

Which of the following transactions would be recorded as a debit in the U.S. current account?

• A)The purchase of a Japanese car by an American
• B)The purchase of air service from a U.S. airline by a Japanese traveler
• C)A short-term loan extended to a Japanese manufacturer by a U.S. bank
• D)The purchase of U.S. cheese by a Japanese bakery
• E)The purchase of an American Treasury bond by a French investment company

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Definitions:

Rate of Interest

The percentage at which interest is charged or paid on a loan or investment over a period of time.

Saving

The act of setting aside a portion of current income for future use, either by holding the funds in cash or placing them in investment accounts.

Investment

The allocation of resources, such as capital, time, and effort, into a venture with the expectation of generating future returns.

Highly Concentrated Industries

Industries in which a small number of firms control a large market share, often leading to decreased competition and higher barriers to entry for new competitors.