The current account is a component of a country's balance of payments that records the transactions related to the export and import of goods and services, income receipts, and unilateral transfers.
Think of the current account as a financial diary that keeps track of all the money coming in and going out of a country. It includes everything from selling products to other countries, receiving income from foreign investments, and even gifts or aid given to other nations.
Balance of Payments: A record of all economic transactions between one country and the rest of the world over a specific period.
Trade Balance: The difference between a country's exports and imports of goods.
Services Trade: The exchange of intangible products such as tourism, transportation, or consulting between countries.
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