MANAGEMENT

Detailed explanation-1: -The current account is an important indicator of an economy’s speed. It is defined as the sum of the balance of trade (goods and services exports minus imports), net income from abroad, and net current transfers.

Detailed explanation-2: -There are three components to the current account – the ‘trade balance’, ‘primary income balance’ and ‘secondary income balance’. In economic analysis or commentary, most attention is usually given to the trade balance, which records the difference between the value of our exports and imports of goods and services.

Detailed explanation-3: -The Components of the Capital Account are Foreign investment, such as FDI and FPI, immovable properties, intangible assets, trade credits, borrowings from other nations, banking capital, and changes in the foreign exchange reserve.

Detailed explanation-4: -The balance of trade is typically measured as the difference between a country’s exports and imports of goods. To calculate the balance of trade, you would subtract the value of a country’s imports from the value of its exports.

Detailed explanation-5: -The components of current accounts include goods, services, unilateral transfers and investment income. However, the components of capital accounts contain foreign direct investments and foreign portfolio investments.