What is the current account balance?

• A. Net exports (exports minus imports) plus net income and net transfers
• B. Net capital inflows minus net capital outflows
• C. Government budget balance
• D. Total savings minus investment

Answer: (A)

The current account balance tracks a country’s transactions with the rest of the world that involve goods, services, income, and transfers. It is calculated as exports minus imports (net exports) plus net income from abroad plus net current transfers. So the sum of net exports and net income plus net transfers captures what the current account records about how a country interacts economically with the world. The other options refer to different parts of the balance of payments or to related identities (capital flows, fiscal policy, or saving–investment), not to the current account itself.