If a Japanese citizen invests in the Australian stock market, the transaction would show up on the capital account of ________.
A) Japan
B) Australia
C) neither Japan nor Australia because it is a current account item
D) both Japan and Australia

Question

Quizplus · Accepted Answer

The capital account records transactions related to international ownership of assets, including stocks. Therefore, if a Japanese citizen invests in the Australian stock market, the transaction would be recorded on the capital account of both Japan (outflow of capital) and Australia (inflow of capital).

If a Japanese Citizen Invests in the Australian Stock Market