All of the Following Are Deficit Items in the Balance

question 222

Multiple Choice

All of the following are deficit items in the balance of payments accounts EXCEPT

• A) U.S. residents purchases of gold from foreign residents.
• B) U.S. tourists spending funds in Europe.
• C) exports of merchandise.
• D) U.S. purchases of foreign companies' stocks and bonds.

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Definitions:

Highly Elastic

Describes a situation where the supply or demand for a product or service changes significantly in response to changes in price.

Per-Unit Subsidy

A government payment made for each unit of a product produced or sold, aimed at reducing the price or encouraging production.

Sales Tax

A tax imposed by government authorities on the sale of goods and services, typically calculated as a percentage of the purchase price.

Regressive Tax

A tax system where the tax rate decreases as the taxable amount increases, placing a heavier burden on lower-income individuals.