Which of the following would contribute to a U.S.balance of payments deficit?
A) Kawasaki builds a motorcycle manufacturing plant in Kansas City.
B) U.S.tourists travel in large numbers to Europe.
C) A wealthy Mexican citizen builds a mansion in Beverly Hills.
D) Zaire pays interest on its debt to the United States.

Question

Quizplus · Accepted Answer

When U.S. tourists travel in large numbers to other countries, they spend money on goods, services, and experiences abroad, which results in a net outflow of funds from the United States. This contributes to a balance of payments deficit.

Answer: D
 When a country, such as Zaire, pays interest on its debt to the United States, it represents an inflow of funds to the United States. This contributes to a balance of payments surplus, not a deficit.

Therefore, the correct answer is only B.

Which of the Following Would Contribute to a U