A country has a trade deficit, positive net investment income, and negative net transfers. What is the likely impact on its current account balance?

• A. The current account balance is likely negative due to the trade deficit.
• B. The current account balance is likely positive due to positive net investment income.
• C. The current account balance is likely positive due to negative net transfers.
• D. The current account balance is unaffected by these components.

Answer: (A)