If net primary income and net secondary income are $10 billion, and a country's purchases of foreign goods and services are $25 billion while its sales of goods and services overseas are $26 billion, it has a:
A)$9 billion deficit in its current account.
B)surplus of $11 billion in its balance of payments.
C)surplus of $36 billion in its current account.
D)$11 billion surplus in its current account.

Question

Quizplus · Accepted Answer

The current account balance can be calculated as:

Current account balance = Exports - Imports + Net Primary Income + Net Secondary Income

Current account balance = $26 billion - $25 billion + $10 billion + $0 billion
Current account balance = $11 billion

A positive current account balance indicates a surplus, so the country has a $11 billion surplus in its current account. Therefore, the correct answer is D.

If Net Primary Income and Net Secondary Income Are $10