The current account includes:

Question

Quizplus · Accepted Answer

The current account is a component of a country's balance of payments and includes transactions that do not create liabilities or claims on the future. It typically includes:
1. Trade balance (exports and imports of goods and services)
2. Net income from abroad (including interest, dividends, and salaries)
3. Unilateral transfers (such as foreign aid, remittances sent home by migrants, and pensions)
Options a and b, FDI (Foreign Direct Investment) and movements of portfolio capital, are actually components of the financial account, not the current account. The financial account records transactions that involve financial assets and liabilities and includes direct investment, portfolio investment, and other investment.
Therefore, the correct answer to the question is c. unilateral transfers, as they are the only item listed that is typically included in the current account.

The Current Account Includes