Both has something to do with investment or traffic with opposite country!
I wish to know the poignant difference.
I suspicion this e.g. belongs to collateral account, though it is stream account, deposit in income
Ford Motor company’s distinction from the plant operated in Hungary.
Thx David, again!
When we contend “change,” what does which mean?
{ 1 comment… read it below or add one }
Capital Account is: the change in foreign ownership of domestic assets minus the change in domestic ownership of foreign assets
Current Account is: Exports plus foreign money coming in (repaid loans and interest) minus imports minus domestic money going out (foreign aid, etc)
Investment income is just any income coming from interest payments, dividends, capital gains, and any other profit that is made through a general investment.
Ford Motor company’s profit from a plant operated in Hungary is simply investment income. It can be used to help figure out capital account, and yes maybe technically it can be considered part of current account.
Hope this helps
Edit note:
Oh — the change in the value of the assets, and/or the change in the amount of assets (changing up or changing down). So if the change in foreign ownership of domestic assets goes up, then that means more cash is coming in, and it results in a country’s capital account going up.