Which of the Following Is a Deficit Item on the U.S

question 53

Multiple Choice

Which of the following is a deficit item on the U.S. balance of payments accounts?

• A) A U.S. firm sells a product to a Mexican firm.
• B) An Italian tourist in Miami purchases a beach ball.
• C) A Spaniard buys 100 shares of Ford stock.
• D) A U.S. resident buys a smartphone in Japan.

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Definitions:

Maturity

The date on which a financial obligation must be repaid in full.

Loanable Funds

The money available for borrowing in the financial market, influenced by savings, borrowing, and interest rates.

Time Preference

The economic theory that individuals prefer to receive goods or services sooner rather than later, all else being equal.

Federal Reserve

The central bank of the United States, responsible for monetary policy, regulation of financial institutions, and ensuring financial system stability.