Which of the following transactions would be included in Germany's current account?
A)A German citizen purchases 100 shares in Qantas.
B)An Australian citizen purchases 100 shares in Germany's BMW company.
C)A German citizen purchases a new Volkswagen made in Germany.
D)An Australian citizen purchases a new Mercedes-Benz car made in Germany.

Question

Quizplus · Accepted Answer

The purchase of goods and services, such as a car, by foreigners (in this case, an Australian citizen buying a Mercedes-Benz made in Germany) affects the trade balance, which is a component of a country's current account. Transactions involving financial assets, like purchasing shares (options A and B), are part of the financial account, not the current account. Option C involves a domestic transaction that does not impact the current account.

Which of the Following Transactions Would Be Included in Germany's