Current vs. Capital Account in Balance of Payments Steps:

• Define current account: includes trade in goods/services, primary income (e.g., rents, dividends), and transfers.
• Classify A: goods import, fits trade balance.
• Classify B: asset purchase, fits capital/financial account.
• Classify C and D: income flows, fit primary income. Why B is correct:
• Purchase of a house abroad is acquisition of a non-produced non-financial asset (real estate), recorded in the capital account per IMF Balance of Payments Manual, not current account. Why the others are wrong:
• A: TV imports are merchandise trade debits in the goods component of current account.
• C: Rents to foreign land owners are property income payments in primary income of current account.
• D: Dividends from foreign firm are investment income receipts in primary income of current account.

Final answer: B