The correct answer is A. The inflow of capital investment by multinational companies.
The current account of the balance of payments records a country’s international transactions in goods, services, income, and current transfers. It is divided into two main components: the trade balance and the non-trade balance. The trade balance is the difference between a country’s exports and imports of goods and services. The non-trade balance includes income from investments, such as interest and dividends, and current transfers, such as remittances from migrant workers.
The inflow of capital investment by multinational companies is not included in the current account because it is a capital account transaction. The capital account records a country’s international transactions in financial assets, such as stocks, bonds, and loans.
Here is a brief explanation of each option:
- A. The inflow of capital investment by multinational companies is a capital account transaction. It is not included in the current account because it does not involve the exchange of goods or services.
- B. Exports of manufactured goods are a current account transaction. They are included in the trade balance.
- C. Interest payments on overseas debts are a current account transaction. They are included in the income account.
- D. Expenditure in a country by overseas visitors is a current account transaction. It is included in the services account.