1.

Distinguish: between current account and capital account,

Answer»
Current AccountCapital Account
Maintains the records of imports and exports of goods and services as well as the record of unilateral transfers.Records all the transactions that cause a change in the status of assets and liabilities of the government or any of the residents of a country.
Components:
Export ar-rd Import of Goods
Export and Import of Services
Unilateral transfers		Components:
FDI and Portfolio Investment
Loans and Borrowings
Banking Capital Transactions
Exports of Goods and services = Imports of goods and Services => Current Account Surplus Export of Goods and Services < Imports of Goods and Services => Current Account DeficitNet Capital Inflow => Capital Account Surplus
Net Capital Outflow => Capital Account Deficit


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