Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Trade in goods and services
B
Government expenditures
C
Domestic investments
D
Foreign reserves
Understanding the Answer
Let's break down why this is correct
Answer
The current account in a country's balance of payments mainly measures the flow of goods, services, income, and transfers between that country and the rest of the world. It shows how much a country exports compared to how much it imports. For example, if a country sells more cars to other countries than it buys from them, it has a trade surplus, which is a positive part of the current account. Additionally, the current account includes money earned from investments and money sent to other countries, like remittances. Overall, it helps to understand a country's economic health and its relationship with global trade.
Detailed Explanation
The current account tracks how much a country sells and buys with other countries. Other options are incorrect because Some might think the current account measures government spending; People might confuse the current account with domestic investments.
Key Concepts
current account
Topic
Current Account and Trade Balance
Difficulty
easy level question
Cognitive Level
understand
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