The meaning of a deficit and a surplus on the current account
A current account deficit means a country spends more on imports and transfers abroad than it earns from exports and income from overseas. A surplus is the opposite: earnings exceed spending.
Formula
Current Account Balance = Export Earnings − Import Spending (± income & transfers)
Real World
The UK has run a current account deficit in most years since the 1980s — in 2022 it reached roughly £97 billion — meaning the UK sends more money abroad for imports and transfers than it earns back.
Exam Focus
State the precise meaning: a deficit means outflows exceed inflows — avoid vague phrases like 'more going out than coming in' without specifying what flows.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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