Current Account Balance Calculation Steps:

• Identify components: exports, imports, net income, net transfers.
• Apply formula: Balance = (Exports - Imports) + Net Income + Net Transfers.
• Plug in values: Assume Exports = $2,500M, Imports =$1,095M, Net Income = $500M, Net Transfers =$500M.
• Compute: ($2,500 -$1,095) + $500 +$500 = $1,405M.

Why B is correct:

• Matches the formula result of $1,405M for the current account balance.

Why the others are wrong:

• A: Incorrect deficit; formula yields surplus.
• C: Overstates by ignoring transfers adjustment.
• D: Ignores imports entirely.

Final answer: B