Question

Distinguish between balance of trade and balance on current account.

Answer 1

	Basis of Difference	Balance of Trade	Balance on Current Account
1.	Meaning	Record of visible transactions.	Record of the visible as well as invisible and unilateral transactions.
2.	Components	Balance of exports and imports of all physical goods.	Balance of visible trade, invisible trade and unilateral transfers.
3.	Nature of transactions	Records the transactions relating to physical goods.	Records the transactions relating to goods, services and unilateral transactions.