2. Explain: U.S. exports earn supplies of foreign currencies that Americans can use to finance imports. Indicate
Question:
2. Explain: “U.S. exports earn supplies of foreign currencies that Americans can use to finance imports.” Indicate whether each of the following creates a demand for or a supply of European euros in foreign exchange markets: LO21.1
a. A U.S. airline firm purchases several Airbus planes assembled in France.
b. A German automobile firm decides to build an assembly plant in South Carolina.
c. A U.S. college student decides to spend a year studying at the Sorbonne in Paris.
d. An Italian manufacturer ships machinery from one Italian port to another on a Liberian freighter.
e. The U.S. economy grows faster than the French economy.
f. A U.S. government bond held by a Spanish citizen matures, and the loan amount is paid back to that person.
g. It is widely expected that the euro will depreciate in the near future.
Step by Step Answer:
Macroeconomics
ISBN: 9781259915673
21st Edition
Authors: Campbell McConnell, Stanley Brue , Sean Flynn