Indicate wether each of the following creates a demand for ora supply of Europea
ID: 1238490 • Letter: I
Question
Indicate wether each of the following creates a demand for ora supply of European euros in foreign exchange markets. a. A U.S. airlaine firm purchases several Airbus planesassembled in France. b. A German automobile firm decides to build an assembly plantin South Carolina. c. A U.S. college student decides to spend a year studying atthe Sorbonne in Paris. d. An Italian manufacturer ships machinery from one Italianport to another on a Liberian freighter. e. The U.S. economy grows faster then the Frencheconomy. f. A U.S. governmant bond held by a Spanish citizen matures,and the loan amount is paid back them. g. It is widely believed that the euro will depreciate in thenear future. Indicate wether each of the following creates a demand for ora supply of European euros in foreign exchange markets. a. A U.S. airlaine firm purchases several Airbus planesassembled in France. b. A German automobile firm decides to build an assembly plantin South Carolina. c. A U.S. college student decides to spend a year studying atthe Sorbonne in Paris. d. An Italian manufacturer ships machinery from one Italianport to another on a Liberian freighter. e. The U.S. economy grows faster then the Frencheconomy. f. A U.S. governmant bond held by a Spanish citizen matures,and the loan amount is paid back them. g. It is widely believed that the euro will depreciate in thenear future.Explanation / Answer
A demand for eurosis created in (a),(c),(e), and (f), but see note below for e. Asupply of euros is created in (b), (d), and (g).
Note: Answerfor (e) assumes U.S. demand for French goods will grow faster thanFrench imports of U.S. goods.