Explain: U.S. exports earn supplies of foreign currencies that Americans can use to

Chapter 27, Problem 2

(choose chapter or problem)

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: LO27.1 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.