Question

Service transactions are the largest component of the US current account.

True or False?

Assume Anaconda Copper Inc. created a subsidiary in Chile last year to mine copper ore. The proportion of net income paid back to the parent company as a dividend would be recorded in the current account subcategory of

A) services

B) net income from investment

C) merchandise

D) none of the above

Answer 1

Answer-

The statement is False.

Service transaction is a transaction which is performed for the customer in exchange for payment as opposed to a retail transaction where goods are exchanged for payment.

For the United States, the largest component of its current account transactions consists of ​payments for imports of goods and services and receipts from exports of goods and services.

Answer-

The correct Option is B. net income from investment.

The proportion of net income paid back to the parent company as a dividend would be recorded in the current account subcategory of net income from investment.

The other Options are incorrect.