The notation is Y = GNP = national income
C = consumption
I = private investment
G = government spending
X = exports
M = imports
T = taxes
The current account balance is given by
A)C + I + G + X + M
B)X − M
C)I + X + M
D)M − X

Question

Quizplus · Accepted Answer

The current account balance is the difference between exports (X) and imports (M), which is given by X - M. Choice A includes consumption and private investment, which are not directly related to the current account balance. Choice C includes private investment, which is already accounted for in choice B. Choice D has the subtracted values reversed, which gives the opposite direction of the current account balance.

The Notation Is Y = GNP = National Income