Is it better if the U.S. dollar rises in valueor if the U.S. dollar falls in value? The question is important because the U.S. Secretary of the Treasury occasionally has the Federal Reserve System intervene to raise or lower the U.S. dollar relative to other currencies. However, such interventions are controversial, because some groups always are hurt, while others benefit.

Suppose the Fed intervenes to raise the price of the dollar relative to the euro. To say it another way, suppose the Fed makes the dollar appreciate against the euro. Of the list of groups mentioned below, who would be opposed and who would be in favor? Explain each answer.

1) Henri, the French man exporting wine to the U.S.

2) Firms exporting computers from the U.S. to Belgium.

3) American students studying in Germany

4) American consumers

5) An American company bringing home profits earned in Spain

6) An Italian textile firm about to build a factory in South Carolina