CBSE 2020 Class 12 Economics Delhi Set 1

Question : 18

Total: 46

Distinguish between 'Current Account Deficit' and 'Current Account Surplus'.

Solution:

Basis	Current Account Surplus	Current Account Deficit
(i) Meaning	When the export of goods and services is excess of the imports of goods and services, then the current account balance is in surplus.	When the export of goods and services falls short of the imports of goods and services, then the current account balance is in deficit.
(ii) Formula	Exports of goods and services >Imports of goods and services.	Exports of goods and services < Imports of goods and services.
(iii) Flow of Income	Net inflow of income into the economy.	Net outflow of income from the economy's circular flow.

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