Question

Assuming zero net unilateral​ transfers, how is the current account balance related to net​ exports?

A. Current account balance equals net exports.
B. Current account balance is unrelated to net exports.
C. Current account balance is the inverse of net exports.
D. Current account balance plus net exports equals zero.

Answer 1

The current account balance is related to net exports because it includes the trade in goods and services, which are components of net exports.

Step-by-step explanation:

The current account balance is related to net exports because it includes the trade in goods and services, which are components of net exports. The current account balance also includes international flows of money from investments and unilateral transfers. Net exports, which refers to the difference between a country's exports and imports, are a part of the current account balance. Therefore, option A is correct: Current account balance equals net exports.