Japan's current account balance equals
A) spending flowing from Japan to the rest of the world on current account less spending flowing into Japan from the rest of the world on current account.
B) spending flowing into Japan from the rest of the world on current account less spending flowing from Japan to the rest of the world on current account.
C) spending flowing into Japan from the rest of the world on current account plus spending flowing from Japan to the rest of the world on current account.
D) the amount the rest of the world owes Japan for purchases of Japanese products and assets.

Question

Quizplus · Accepted Answer

The current account balance measures the net flow of goods, services, and investments between a country and the rest of the world. It is calculated as the value of a country's exports minus the value of its imports. So, the correct option is B, i.e., the current account balance equals spending flowing into Japan from the rest of the world on current account less spending flowing from Japan to the rest of the world on current account.

Japan's Current Account Balance Equals