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Chapter 23: Q 1. (page 575)

If foreign investors buy more U.S. stocks and bonds, how would that show up in the current account balance?

Short Answer

Expert verified

No, it will not show up.

Step by step solution

01

Step 1. Definition

The current account balance is the balance that includes the important activities of a country like capital markets and services.

02

Step 2. Explanation

The stock and bond values are not shown in the current account balance but yes the dividends and interest from the stocks and bonds respectively will be shown as an import to income current account.

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