Question: 3. Explain the numerical effect on both the U.S. current account and the U.S. capital account from each of these examples. a. In the United

3. Explain the numerical effect on both the U.S.

current account and the U.S. capital account from each of these examples.

a. In the United States, the Best Buy company purchases $1 million worth of TVs from the Samsung corporation, a Korean firm, using U.S. dollars. In addition, Samsung keeps the U.S. dollars.

b. Best Buy purchases $1 million worth of TVs from the Samsung corporation, using U.S.

dollars. Samsung then trades its dollars to a third party for won, the Korean currency.

c. Best Buy trades $1 million for Korean won and then uses the won to buy TVs from Samsung. L-9658

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