The Current account includes which of the following?

The Current account includes which of the following?

• A. Goods and services plus net international transfer payments and factor income.
• B. Capital inflows and outflows.
• C. Total net financial assets held by residents.
• D. Overall balance of payments across all accounts.

Answer: (A)

The current account records a country’s transactions with the rest of the world for goods and services and for income and transfers. It includes the trade balance (exports minus imports) plus net earnings from abroad (factor income) and net unilateral transfers (like remittances and aid). The statement that lists goods and services plus net international transfer payments and factor income matches exactly these components, so it’s the best choice. The other options describe the capital/financial side (capital inflows and outflows) or the overall balance of payments, not the current account itself.

The current account records a country’s transactions with the rest of the world for goods and services and for income and transfers. It includes the trade balance (exports minus imports) plus net earnings from abroad (factor income) and net unilateral transfers (like remittances and aid). The statement that lists goods and services plus net international transfer payments and factor income matches exactly these components, so it’s the best choice. The other options describe the capital/financial side (capital inflows and outflows) or the overall balance of payments, not the current account itself.