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 |
1. Export of goods 2. 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. |