Which situation best describes an exchange transaction?

• A. Fees charged by a municipal airport
• B. Property taxes collected by the city
• C. Donations from residents
• D. Grants from the federal government

Answer: (A)

Exchange transactions occur when the government provides goods or services in return for consideration. Fees charged by a municipal airport illustrate this because the airport delivers a service—such as aircraft operations support, passenger handling, or facility use—and collects a fee in exchange, so the revenue is earned through a direct service provided.

The other options involve transfers without a direct service in return: property taxes fund government operations and aren’t tied to a specific, immediate service; donations are voluntary gifts; federal grants are transfers with conditions rather than payment for a government-provided service.