The current account balance is
A) the supply of a country's exports less the country's own demand for imports.
B) the demand for a country's exports plus the country's own demand for imports.
C) the country's own demand for imports less the demand for a country's exports.
D) the demand for a country's exports less the country's own demand for imports.
E) the country's federal reserves minus the national debt.

Question

Quizplus · Accepted Answer

The current account balance is the difference between the value of exports and the value of imports of goods and services. Therefore, option D, which states "the demand for a country's exports less the country's own demand for imports," is the correct definition of current account balance. Option A is incorrect because it puts the emphasis on supply of exports instead of demand for exports, while option B adds the demand for a country's exports instead of subtracting it. Option C subtracts the demand for exports instead of subtracting the demand for imports. Lastly, option E describes an unrelated concept.

The Current Account Balance Is