1.

Distinguish between current account and capital account

Answer»
Basis of DistinctionCurrent AccountCapital Account
(i) Nature of itemsIt contains the transactions of flow nature i.e., transactions which are measured over a specified period.It contains the transactions of stock nature i.e., transactions which are measurable at a particular point of time
(ii) EffectIts components do not alter the value of assets and liabilities of a country.Its components alter the value of assets and liabilities of a country.
(iii) Components(a) Export and imports of goods and services
(b) Unilateral transfers.		(a) Foreign investment
(b) External loans
(c) Private transactions
(d) Official transactions.


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