Overview
The current account and trade balance are essential concepts in economics that help assess a country's economic health. The current account includes trade in goods and services, income, and transfers, while the trade balance specifically measures the difference between exports and imports. Understan...
Key Terms
Example: The current account includes trade in goods and services.
Example: A trade balance of $10 billion means exports exceed imports by that amount.
Example: Cars manufactured in Germany sold to the U.S. are exports.
Example: Oil imported from Saudi Arabia to the U.S. is an import.
Example: A country with a $5 billion surplus sells more than it buys.
Example: A country with a $3 billion deficit buys more than it sells.
Related Topics
Balance of Payments
A comprehensive record of all economic transactions between residents and the rest of the world.
intermediateForeign Exchange Markets
Markets where currencies are traded, affecting exchange rates and trade balances.
intermediateInternational Trade Policies
Government policies that regulate international trade, impacting the current account.
advancedKey Concepts
Current AccountTrade BalanceExportsImports