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Differentiate between capital account and current account.
The major differences between capital account and current account are as follows −
Capital Account
These are accounts related to capital investments and expenditures of a country to another.
It measures inflow and outflow of capital in economy.
It evaluates country net investment position.
Impacts foreign assets and liabilities of a country.
Deals with source and utilisation of capital.
Current Account
These are accounts related to trade of goods and services of a country.
It measures inflow and outflow of goods and services in the economy.
Merchandise trade, services, income receipts and unilateral transfers are key components.
It evaluates trade surplus/trade deficit of a country.
Impacts on net income and output of a country.
Deals with receipts and disbursements in cash and non-capital items.
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