A nation's balance on the current account is equal to its exports less its imports of:
A)goods and services.
B)goods and services, minus Canadian purchases of assets abroad.
C)goods and services, plus net investment income and net transfers.
D)goods and services, plus foreign purchases of assets in Canada.

Question

Quizplus · Accepted Answer

Balance on the current account includes both goods and services as well as net investment income and net transfers. Therefore, option C is the correct choice. Option A is too limited and does not include investment income and transfers. Option B includes only Canadian purchases of assets abroad and excludes foreign purchases of assets in Canada. Option D includes foreign purchases of assets in Canada, but does not include investment income and transfers.

A Nation's Balance on the Current Account Is Equal to Its