Trade Tides & Turning Points: Mastering the Current Account

Meaning and components of Current Account in Balance of Payments, Calculating Current Account Balance

What you will learn

Description

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What is the meaning of Current Account in Balance of Payments?
A country’s current account balance can be influenced by a variety of factors. What are those factors?
What are the transactions which are recorded in the current account of balance of payments?
What are the components of Current account in balance of payments?
What is meant by visible items?
What type of transactions are recorded in respect of goods?
What is meant by invisible items?
What type of transactions are recorded in respect of services?
What is the meaning of unilateral transfers?
If unilateral transfers are sent abroad, where are they recorded in the current account – debit or credit side?
What is meant by income from investments received from abroad and where are they recorded in the current account?
How can we calculate the current account balance in Balance of Payments?
What is meant by balance of visible trade and balance of invisible trade?
How can we calculate the net income from abroad and the net unilateral transfers?
What is meant by Surplus current account?
What does surplus current account indicate?
What is meant by Deficit current account?
What does deficit current account indicate?
Is it possible that in surplus current account, any specific component of current account may individual deficits but overall, credit side is more than debit side?
What are the three different situations which can arise in respect of current account in balance of payments?