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What does the capital account balance represent in a nation's economy?

A. Domestic investment spending minus domestic saving
B. Sale of real and financial assets to people living abroad minus its purchases of real and financial assets from foreigners
C. Exports of goods and services minus its imports of goods and services
D. Net investment income minus its net transfers

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GinnyAnsweridn

Final answer:

The capital account balance reflects a country's international financial transactions through assets. It can be either a surplus or a deficit.


Explanation:

In a nation's context, the capital account balance represents the difference between rest-of-world purchases of its assets and its purchases of rest-of-world assets. It is a reflection of the country's international financial transactions. For instance, a positive balance indicates a surplus, while a negative balance signifies a deficit.


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