Answer to Question #313195 in Macroeconomics for captain nyagah

Question

Explain the effect of transfer payments like workers remittances on current account

Answer 1

Current transfers are unilateral transfers with nothing received in return. These include workers' remittances, donations, aids and grants, official assistance, and pensions. Due to their nature, current transfers are not considered real resources that affect economic production and hence do not affect the current account.