If a South Korean buys $1,000 dollars worth of U.S. stocks, the U.S. current account will _______ and the U.S. trade deficit will _______.

Question

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When a South Korean buys U.S. stocks, it is considered a financial inflow, which increases the financial account, not the current account. The trade deficit, which is part of the current account, will increase as the purchase does not affect the trade balance directly.

If a South Korean Buys $1,000 Dollars Worth of U