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

Question

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

A.a deposit in a bank in New York by a British firm.

B.the sale of a carburetor made in Michigan to a Honda plant in Ohio.

C.the payment of a dividend from a Canadian firm to an American living in Maine.

D.a U.S. resident flies from New York to Rome on British Airways.

All of the following are surplus items on the balance of payments accounts EXCEPT

A.foreign tourists spending funds in the United States.

B.exports of merchandise.

C.sales of U.S. dollars to foreign residents.

D.U.S. residents purchases of gold from foreign residents.

Explanation / Answer

1) an example of a deficit item on the U.S balance of payments is a U.S resident flies from new york to rome on airways. because when a U.S resident flies from new york to rome on british airways, it pays to the british airways which is a deficit item on the U.S balance of payments.

so, correct option is D

2) All of the following are surplus items on the balance of payments account except sales of U.S dollars to foreign students.

so, correct option is C

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