Question

What is the differences between Current Account Deficit and Current Account Balance, or are they both the same thing? Can someone explain to me, please?

Answer 1

The balance of payments has 2 accounts - the current account and capital account.

The current account deals with all the nation transactions with the rest of the world (payments for exports and imports, foreign aid, and payments to foreign investors).

The current account balance that is the summation of this account can either result in a deficit or surplus that is

1. current account deficit = is when the country spends more on the imported goods than the exported

2. current account surplus=Exporting greater value of goods and services than importing