Of the following, the one that appears in the current account of the balance of payments is ________.

Question

Quizplus · Accepted Answer

Income earned by Canadian subsidiaries of Barclay's Bank of London is a factor that affects the current account of the balance of payments, as it represents the flow of income from overseas businesses operating within Canada.

Answer: A, C, D 
 While these transactions all involve international financial flows, they do not directly affect the current account of the balance of payments. An Italian investor's purchase of RIM stock represents a financial account transaction, as it involves the transfer of ownership of financial assets. A loan by a Swiss bank to a Canadian corporation also represents a financial account transaction, as it involves an international borrowing or lending. Finally, a purchase of a British Treasury bond by the Bank of Canada represents an official reserve account transaction, as it involves the acquisition of foreign financial assets by the Canadian central bank.

Of the Following, the One That Appears in the Current