Differentiate between balance of trade and current account balance.
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Points of difference
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Balance of trade
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Current account balance
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Definition
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It is the difference between the values of exports and imports of goods of a country.
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It is the difference between the values of exports and imports of goods, services and unilateral transfers of a country.
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Components
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(i) Export of goods.
(ii) Import of goods.
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Export and import of goods, export and import of services, unilateral transfers.
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Nature of transactions
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It records transactions related to visible items (i.e. goods) only.
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It records the transactions related to visible items (goods) as well as invisible items (services) and unilateral transfers.
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