Which of the following is a key component that determines a country's primary income (within the country's current account)?

Question

Quizplus · Accepted Answer

Direct foreign investment is a key component that determines a country's primary income within the current account. This refers to investments made by foreign entities in a country's domestic economy, such as acquiring stocks or opening a manufacturing plant. This type of investment generates income for the domestic economy, and therefore contributes to the primary income of a country.

International trade, tax rates, and gifts may also contribute to a country's current account, but they do not directly determine the primary income. International trade refers to the exchange of goods and services between countries, which affects a country's balance of payment but does not necessarily generate income. Tax rates may affect the income of individuals and businesses within the country, but do not directly determine a country's primary income within the current account. Gifts, while a component of the current account, are considered secondary income rather than primary income.

Which of the Following Is a Key Component That Determines