Distinguish between Balance of Trade and Balance of Current Account of the Balance of Payments account.
Distinguish between Balance of Trade and Balance of Current Account of the Balance of Payments account.
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Balance of trade account includes only visible items of trade. It is defined as the difference between export of goods and import of goods. Balance of trade account = exports of visible items – imports of visible items.
On the other hand, balance on current account includes transaction of visible items, invisible items, and unilateral transfers.
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