1) The document discusses balance of payments accounting, which tracks the flow of goods, services, and financial transactions between a country and the rest of the world. It is made up of the current account and the capital/financial account. 2) The current account tracks trade in goods/services and income flows. A trade deficit means expenditure on imports exceeds earnings from exports. 3) The capital/financial account tracks the financial flows that result from trade imbalances. It must equal the negative of the current account to maintain overall balance.