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:

Perfect Competition

A market structure characterized by a large number of small firms, identical products, and free entry and exit from the market.

Identical Goods

Products that are indistinguishable from each other in the eyes of the consumer, often associated with perfect competition markets.

Profit-Maximizing Output

The level of production at which a company can achieve the highest profit, where marginal revenue equals marginal cost.

Total Revenue

The total amount of money generated by the sale of goods or services related to the company's primary operations.