Question

Based on Table 1, the balance on the current account is:

Table 1

$\begin{array}{cc}\text{Exports of goods and services}& 1000\\ \text{Imports of goods and services}& 800\\ \text{Net change in assets owned abroad}& 500\\ \text{Net change in foreign owned assets at home}& 400\\ \text{Unilateral transfers received}& 100\\ \text{Unilateral transfers paid}& 200\\ \text{Investment income paid to foreigners}& 300\\ \text{Investment income received from foreigners}& 400\end{array}$

• A. +100
• B. +200
• C. 0
• D. -100

Answer 1

The correct option is B

+200

Current account balance looks at exports and imports of goods and services and unilateral transfers to and from abroad, as well as investment income.

Current account balance = (1000 - 800) + (100 - 200) + (400 - 300) = 200