A major hurricane damages the infrastructure in Econia. In response, Macroland sends $5 million in aid to Econia. How does this show up in Econia's balance of payments accounts?

Question

Quizplus · Accepted Answer

Aid from another country is recorded as a transfer payment in the recipient country's current account, increasing it because it does not require a direct economic output in exchange.

A Major Hurricane Damages the Infrastructure in Econia