If the income from investments abroad and net transfer payments are negligible, the current account becomes equivalent to a country's net exports.

Question

Quizplus · Accepted Answer

This is because the current account balance includes the balance of trade (exports minus imports), net income from investments abroad and net transfer payments. If the income from investments abroad and net transfer payments are negligible, then the current account balance is mostly determined by net exports.

If the Income from Investments Abroad and Net Transfer Payments