ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -There are two important accounts within the balance of payments: the current account and the financial account (formerly known as the capital account). The current account records a nation’s exports and imports of goods and services, and also includes net investment income and net transfers.

Detailed explanation-2: -In economics, a country’s current account records the value of exports and imports of both goods and services and international transfers of capital. It is one of the two components of its balance of payments, the other being the capital account (also known as the financial account).

Detailed explanation-3: -The current account represents a country’s imports and exports of goods and services, payments made to foreign investors, and transfers such as foreign aid.

Detailed explanation-4: -The current account provides an indication of the country’s economic activity. It indicates whether the country is in a surplus or deficit. The basic four components of the current are goods, services, current transfers, and incomes. The current account measures the country’s net income over a certain period.