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