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Current Account

Categories: Econ, Banking

A nation wants to determine if it’s a net debtor or a net lender to the world. The way to do that is to add up the balance of imports and exports, cross-border investment earnings, and transfer payments over the last quarter or last year.

This equation produces a country’s current account. When the account is positive, it's operating a surplus. When the figure is negative, it's operating a current account deficit.

Find other enlightening terms in Shmoop Finance Genius Bar(f)