An Example of a Deficit Item on the U

question 26

Multiple Choice

An example of a deficit item on the U.S. balance of payments is

• A) the sale of a carburetor made in Michigan to a Honda plant in Ohio.
• B) a deposit in a bank in New York by a British firm.
• C) a U.S. resident flies from New York to Rome on British Airways.
• D) the payment of a dividend from a Canadian firm to an American living in Maine.

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Definitions:

Defined Benefit Pension Plan

A type of pension plan where an employer promises a specified pension payment upon retirement, based on the employee's earnings history and tenure.

Return On Plan Assets

A measure of the earnings generated from the investments within a pension fund, indicating the efficiency and performance of the asset management.

Pension Expense

The cost recognized in an employer's financial statements for the benefits provided to employees during a period.

Defined Contribution

A type of retirement plan where the amount invested is defined, but the future benefits are not guaranteed and depend on investment performance.