Balance of Payments
Account recording all economic transactions between country and rest of world.
Formula
Current Account Balance = (Exports − Imports) + Net Income + Net Transfers
Real World
The UK has run a persistent current account deficit for decades — in 2023 it was around £90bn — meaning the UK imports far more goods and services than it exports, requiring foreign investment to finance the gap.
Exam Focus
For 'assess' questions, always link the deficit to a consequence (e.g. currency depreciation) to access top marks.
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