12-22-2018, 04:50 PM
Deficit means shortfall, shortage and deficiency. So Current Account Deficit in simple terms can be explained as it is the difference between a government's current and targeted level of income. Suppose for example a government current level of income is $ 8 and the targeted level of income is $18. So the current account deficit of the state would be $10.
Some people considered and used Current Account Deficit and Trade Deficit interchangeably but this is not correct. There is a huge difference between the two.
Difference Between Current Account Deficit And Trade Deficit:
When a government imports are higher than its exports then such a condition is called Trade Deficit.
Current Account Deficit is a broader measure and concept. Trade Deficit is a part of it. Aside from Trade Deficit, Current Account Deficit also includes tax, dividends and so on.
Some people considered and used Current Account Deficit and Trade Deficit interchangeably but this is not correct. There is a huge difference between the two.
Difference Between Current Account Deficit And Trade Deficit:
When a government imports are higher than its exports then such a condition is called Trade Deficit.
Current Account Deficit is a broader measure and concept. Trade Deficit is a part of it. Aside from Trade Deficit, Current Account Deficit also includes tax, dividends and so on.
