The sum of the balance of trade, the balance of income, and net transfers is

Question

Quizplus · Accepted Answer

The sum of the balance of trade (exports minus imports of goods and services), the balance of income (income earned by domestic residents from foreign investments minus income earned by foreign residents from domestic investments), and net transfers (government and private transfers between domestic and foreign residents) is known as the current account. Therefore, choice A is the correct answer. Choice B refers to a different type of account that includes capital transfers, while choices C and D refer only to specific components of the current account.

The Sum of the Balance of Trade, the Balance of Income