Which statement best distinguishes the current account from the balance of payments?

Which statement best distinguishes the current account from the balance of payments?

• A. The current account includes capital flows
• B. The balance of payments includes only the government budget
• C. The current account records trade in goods/services, income, and current transfers; the balance of payments includes the current account plus the capital and financial account
• D. The balance of payments is a measure of inflation

Answer: (C)