Question

Give two differences between current account and capital account of balance of payments account.

Answer 1

Current account	Capital account
1. Records trade in goods, services, income, and transfers.	1. Records capital transfers, like investments and loans.
2. Deals with short-term economic transactions.	2. Deals with long-term capital movements.
3. Does not lead to a change in ownership of assets.	3. Leads to a change in ownership of financial and real assets between countries.