Which of the following is included in a nation's current account?
A) Purchases of foreign assets
B) Borrowings from abroad
C) Foreign purchases of U.S. financial assets
D) Investment income receipts
E) Purchases of foreign real property

Question

Quizplus · Accepted Answer

The current account includes international trade in goods and services, net investment income, and net transfers. Investment income receipts are included in the current account as it reflects the earnings from investments made abroad by residents of the country. Purchases of foreign assets, foreign purchases of U.S. financial assets, and purchases of foreign real property are all examples of international capital flows and are not included in the current account. Borrowings from abroad are recorded in the financial account of the balance of payments.

Which of the Following Is Included in a Nation's Current