Differentiate between balance of trade and current account balance.

Question

Philoid · Accepted Answer

Main points of difference between balance of trade and current account balance are –

1) Balance of trade is the difference between export and import of visible goods only whereas current account balance is the difference between export and import of goods as well as services.

2) Current account balance is a wider term, it includes balance of trade.

3) Balance of trade includes only visible items whereas current account balance includes invisibles also.