If an Australian Company Sells Insurance to a Foreign Company

question 136

Multiple Choice

If an Australian company sells insurance to a foreign company, how does this affect Australia's balance of payments?

• A)It increases exports of services.
• B)It increases capital inflows.
• C)It increases imports of goods.
• D)It lowers the balance on the current account.

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Definitions:

Inventory Sale

The process of selling goods that a company has produced or purchased for resale.

Book Value

The net value of a company's assets minus its liabilities, often used to estimate the company's value if it were to be liquidated.

Accounts Receivable

Money owed to a company by its debtors for goods or services that have been delivered or used, but not yet paid for.

Source of Cash

Various origins from where a company or individual receives cash, including operations, financing activities, investments, and external funding.