A Level Economics (9708)•9708/12/M/J/19

Explanation
Current Account Excludes Capital Flows
Steps:
- Define current account: includes trade in goods/services, primary income (e.g., profits), and transfers.
- Classify A: exports of primary commodities count as goods trade.
- Classify B and D: banking services and overseas profits are service income and primary income, respectively.
- Classify C: overseas investment involves capital transfers, not current flows.
Why C is correct:
- Overseas investment records capital account transactions for asset purchases abroad, per IMF balance of payments manual.
Why the others are wrong:
- A: Represents merchandise exports in the goods balance of the current account.
- B: Counts as invisible exports in the services component of the current account.
- D: Forms part of net primary income from foreign investments in the current account.
Final answer: C
Topic: Current account of the balance of payments
Practice more A Level Economics (9708) questions on mMCQ.me