Anaconda Copper Inc. created a subsidiary in Chile last year to mine copper ore. The proportion of net income paid back to the parent company as a dividend would be recorded in the current account subcategory of:
A) services trade.
B) income trade.
C) goods trade.
D) current transfers.

Question

Quizplus · Accepted Answer

The proportion of net income paid back to the parent company as a dividend falls under the category of income trade, as it represents an income flow from a foreign subsidiary to the parent company. The current account subcategory of income trade captures such flows.