Twinings (a UK firm) buys 1 billion of tea leaves from India using money from...
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Twinings (a UK firm) buys 1 billion of tea leaves from India using money from its Indian bank account. It brings the tea to the UK. In the UK, it uses the tea leaves to make boxes of tea, and sells 500 million boxes back to India, each for a price of 2. It then credits the resulting revenue of 1 billion back into its Indian bank account. What happens to the UKs balance of payments as a result of this transaction?
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