Which of the following would be part of the nation's current account?
A)An old house purchased by an American in Italy
B)The purchase of a U.S. Treasury bond by a foreigner
C)The interest an American earns on a British bond
D)A factory built by the Japanese in the United States

Question

Quizplus · Accepted Answer

The current account includes transactions in goods, services, primary income, and secondary income between residents and non-residents. The interest an American earns on a British bond falls under primary income, which is part of the current account. Choices A, B, and D involve capital transfers or investments, which are part of the financial account, not the current account.

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