A citizen in a developing country with a currency policy of convertibility on the current account could do the following transactions except:
A)purchase foreign currency in order to import a BMW.
B)sell foreign currency resulting from the exports of manufactured t-shirts.
C)purchase foreign currency in order to purchase a U.S.treasury bond.
D)sell foreign currency resulting from the sale of a U.S.treasury bond.

Question

Quizplus · Accepted Answer

Convertibility on the current account allows for transactions related to trade in goods and services, but not for capital account transactions like purchasing foreign securities.

A Citizen in a Developing Country with a Currency Policy