Current account

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The balance of payments consists of:

  • the CURRENT account
  • the CAPITAL account
  • the FINANCIAL account

At AS level we are only looking at the current account. The current account itself compromises four sections:

  • trade in goods
  • trade in services
  • income
  • transfers

In the current account, we are only talking about the value of goods, services, incomes and transfers. The current account does not take into account the actual volume of goods. 

If the current account is negative then the economy is in deficit or

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