An example of a transaction that will be a surplus item on the U.S. balance of payments is
A) the purchase of General Motors stock by a German resident.
B) the purchase of a Mercedes-Benz by an American.
C) a Nissan plant in Tennessee buying parts from the main plant in Japan.
D) a gift of wheat from the United States government to Egypt.
Answer: A
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When the value of a payment is adjusted in proportion to changes in the CPI, economists refer to that as
a. nominalization b. realization c. indexation d. stabilization e. depreciation
Given freedom of movement for both goods and resources, if Florida producers specialize in oranges and Georgia producers specialize in peaches, it would be reasonable to conclude that
a. the opportunity cost of growing oranges is higher in Florida than in Georgia. b. Georgia has a comparative advantage in producing oranges. c. Florida has a comparative advantage in producing oranges. d. total output will be expanded when Georgia allocates more resources to producing oranges and Florida allocates more resources to producing peaches.