Question

Difference between current account and capital account of balance of payments

Answer 1

Answer:

Difference between current and capital account:

1. A current account is the representation of the balance in the trade of a country while the capital account is a representation of capital and expenditures which do not affect the trade of a country.

2. current account affects the net income of a country while capital account affects the financial account of an organization.

3. A current account is the inflow and outflow of funds of international trade while in the capital account, the capital is invested for making international trade happen.