1. Suppose a U.S. resident buys a case of French wine for $1,000. The owner of the...

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1. Suppose a U.S. resident buys a case of French wine for $1,000. The owner of the French vineyard uses this money to buy $1,000 worth of IBM stock. (a). How do these transactions show up in the balance of payments? (b). If these are the only transactions in the economy, will there be a balance of payments deficit? A balance of trade deficit?

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