Question
Consider the following transaction: An Australian company sells 10,000 tonnes of iron ore to a Japanese steel producer. The per tonne price is $100. How
Consider the following transaction: An Australian company sells 10,000 tonnes of iron ore to a Japanese steel producer. The per tonne price is $100. How would this be accounted for in the Australian balance of payments?
A. An AUD1m debit in the financial account representing the AUD payment. An AUD 1m credit in the current account representing the iron ore.
B. None of the other answers.
C. An AUD1m credit in the financial account representing the AUD payment. An AUD 1m debit in the current account representing the iron ore.
D. A debit in the financial account representing the payment. A credit in the current account representing the iron ore. The value of the credit and the debit will depend on the S(JPY/AUD) spot rate.
E. A credit in the financial account representing the payment. A debit in the current account representing the iron ore. The value of the credit and the debit will depend on the S(JPY/AUD) spot rate.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started