AP MacroeconomicsInternational Trade & Finance
Current Account
The current account records a country's trade in goods and services plus net income and net transfers with the rest of the world.
Its largest component is the trade balance (net exports). A current account deficit means a country imports more than it exports and is offset by a financial account surplus. It shows how a country pays for its foreign transactions.
Formula / Example
Current account = Net exports + Net income + Net transfers.
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