explain in detail each of the five sub-questions: Classify the following as a tr

Question

explain in detail each of the five sub-questions:

Classify the following as a transaction reported in a sub-component of the current account, or the capital and financial accounts of the countries involved:

1. An Australian food chain imports vegetables from China.

2. A Dutch firm engages an Australian firm to provide a service

3. A Chinese student, residing in Australia, pay for his study at an Australian university

4. A US company buys 100% share of a Japanese company.

5. An American tourist pays for her stay at a hotel in Melbourne, Australia using her American Express Credit card.

Explanation / Answer

1. An Australian food chain imports vegetables from China.- current account

2. A Dutch firm engages an Australian firm to provide a service - current account

3. A Chinese student, residing in Australia, pay for his study at an Australian university - current account

4. A US company buys 100% share of a Japanese company.- capital account transaction

5. An American tourist pays for her stay at a hotel in Melbourne, Australia using her American Express Credit card.- current account

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