A nation's current account balance is equal to its exports less its imports of:

Question

Quizplus · Accepted Answer

The current account balance includes the balance of trade (exports minus imports of goods and services), as well as net investment income and net transfers (such as foreign aid). Option A is only the trade balance and does not account for investment income and transfers. Option B subtracts U.S. purchases of assets abroad, which is not part of the current account. Option D adds foreign purchases of assets in the United States, which is also not part of the current account. Therefore, the correct answer is C.

A Nation's Current Account Balance Is Equal to Its Exports