Which of the following would be part of the nation's current account?
A)an old house purchased by a Canadian in Croatia
B)the purchase of a Canadian Treasury bond by a foreigner
C)the interest a Canadian earns on a British bond
D)a factory built by the Japanese in Canada

Question

Quizplus · Accepted Answer

The current account is a measure of a country's international trade where the balance of trade is the difference between a country's export earnings and import expenditure. Option C represents interest earned by Canadians from foreign bonds, which is part of the nation's current account.

Answer: A
 Option A represents a Canadian purchasing an old house in Croatia, which would be included in the nation's current account in the form of a service account.

Answer: D
 Option D represents a factory built by a foreign country in Canada, which would be included in the nation's capital account, which measures investment flows between countries. Option B represents a domestic transaction of a Canadian buying a Treasury bond, which wouldn't be included in the current account as it doesn't involve international trade.

Which of the Following Would Be Part of the Nation's