CBSE 2020 Class 12 Economics Delhi Set 2

Question : 8 of 13

Marks: +1, -0

Distinguish between 'trade deficit' and 'current account deficit'.

Solution:

Basis of difference	Trade Deficit	Current Account Deficit
(i) Meaning	If the imports of goods is more than exports of goods then trade account balance is in deficit.	If the import of goods and services is less than export of goods and services, then the current account balance is in deficit.
(ii) Formula	Imports - Exports	Imports of goods and servicesImports of goods and services.

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