Answer :
When a U.S. company makes a $200,000 donation to the International Red Cross to help the victims of an earthquake in India, the transaction is recorded in the current account.
The current account keeps track of a country's interactions with the rest of the world during a certain time period, like a year or quarter, including its net commerce in products and services, net returns on international investments, and net transfer payments. The country's imports and exports of products and services, payments to foreign investors, and transfers like foreign aid are all reflected in the current account. A positive current account indicates that the country is a net exporter of goods and services, whereas a negative current account indicates that the country is a net importer of goods and services. Whether positive or negative, a country's current account balance will be equal to but the opposite of its capital account balance.
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