What is net primary income (NPY) concerned with?

Net primary income (NPI) relates specifically to the income earned by residents from foreign investments and the income paid to foreign investors for their investments within the domestic economy. This includes wages, dividends, interest, and profits that are generated abroad and returned to the home country, minus similar payments made to foreign entities within the domestic economy.

This distinction is key, as NPI does not encompass the value of goods and services traded internationally (which would fall under trade balance) or solely domestic sales revenue. It also does not relate to monetary transfers or financial aid between nations, which are typically classified as transfer payments. By focusing on the flow of income in relation to investments, option B accurately captures the essence of net primary income.