Th2.1: Current Account Deficit and Surplus Flashcards
1
Q
Current account balance formula
A
balance of trade + balance of invisibles + net income and current transfers
2
Q
What is a current account surplus?
A
where exports are greater than imports, so the current balance is positive
3
Q
What is a current account deficit?
A
where imports are greater than exports, so the current balance is negative
