Answer to Question #102123 in Macroeconomics for komalpreet kaur

Question

Indicate whether each of the following creates a demand for, or supply of Euros in foreign
exchange markets:
(a) An Australian importer purchases a shipload of French wine.
(b) A German motor vehicle manufacturer decides to build an assembly plant in Adelaide.
(c) An Australian university student decides to spend a year studying at an Irish
university.
(d) A French manufacturer exports machinery to Morocco on an Australian ship.
(e) An Australian government bond held by a Dutch citizen matures.

Answer 1

Indicate whether each of the following creates a demand for, or supply of Euros in foreign

exchange markets:

(a) An Australian importer purchases a shipload of French wine.--Creates supply of Euros

(b) A German motor vehicle manufacturer decides to build an assembly plant in Adelaide.--Creates Demand for Euros

(c) An Australian university student decides to spend a year studying at an Irish

university.---Creates Supply of Euros

(d) A French manufacturer exports machinery to Morocco on an Australian ship.----Creates Demand for Euros

(e) An Australian government bond held by a Dutch citizen matures--Supply of Euros