Economics Extra credit work please.

PAGE ONE Economicse Federal Reserve Bank of St. Louis | research.stlouisfed.org 5 Period_ Federal Reserve Bank of St. Louis Page One Economics: \"International Trade: Making Sense of the Trade Deficit\" After reading the article, answer the following questions: 1. Explain the difference between the current account and the capital and financial account in the balance of payments. What is a trade deficit? N 3. Assume a U.S. firm buys (imports) $5 million (in U.S. dollars) of foreign goods. That transaction by itself increases the trade deficit by $5 million. But, the $5 million will flow back to the United States to purchase either (i) U.S. goods and services or (ii) U.S. assets. How does the way the $5 million comes back to the United States determine whether there will be balanced trade or a trade deficit? ' How does the U.S. economy benefit from either transaction (the foreign purchase of U.S. goods and services [exports] or the purchase of U.S. assets)? 4. How does the \"global savings glut\" help explain the trade deficit