Which of the following is an item in the current account balance of the United States?
A) the purchase of a U.S. company by a foreign company
B) the purchase of stock in a foreign corporation by a U.S. company
C) the purchase of insurance in the United States by a foreign company
D) the purchase of a United States Treasury bond by a wealthy foreigner

Question

Quizplus · Accepted Answer

The current account balance includes all international transactions related to goods and services, income, and current transfers. The purchase of insurance in the United States by a foreign company is considered a transaction related to services and is included in the current account balance. The purchase of a U.S. company, stock in a foreign corporation, and Treasury bond are related to capital and financial accounts, which are not included in the current account balance.

Which of the Following Is an Item in the Current