Tuesday, 2 September 2014

Current Account Deficit Vs Fiscal Deficit, a simple explanation

I am starting with an extremely simple definition for the two.

Current Account Deficit

          It is the difference between the total exports and imports of the country. Current Account Deficit in a period happens when the imports in dollars crosses the exports for a country.

Fiscal Deficit 

          It is the difference between the total revenue ( Mainly from taxes ) of a country and the total expenditure ( Mainly public expenditures ) of a country. Fiscal deficit in a period happens when the expenditures crosses the revenue.

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