Which of the following is a deficit item in the U.S. current account?

Question

Quizplus · Accepted Answer

When U.S. residents travel abroad and spend money on goods and services in a foreign country, it is considered a deficit item in the U.S. current account because it represents an outflow of U.S. dollars to other countries. Toyota building a new plant in California (A) would represent a foreign investment in the U.S. and would be a surplus item. The building of new homes by a Saudi prince in California (C) would also be a foreign investment and a surplus item. Sony buying a new film studio in Florida (D) would be a financial transaction and would not affect the current account.

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