The current account records:

Question

Quizplus · Accepted Answer

The current account records the current flows of imports and exports of goods and services, net income earned by residents from foreign assets and net transfer payments. Option A is incorrect because the current account records the current flows and not the past year's flows. Option C is incorrect because the current account records only the current flows of funds and not all the foreign direct investment received by a country in a year. Option D is incorrect because the purchase of financial assets by residents is not recorded in the current account, but in the capital account. Option E is incorrect because the current account only records current flows of imports and exports of goods and services, income earned by residents from foreign assets, and net transfer payments, and not the purchase of all real assets by the citizens of a country in a year.

The Current Account Records