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Demand for French euros or a supply of French euros

Denote whether each of the following build a demand for, or a supply of, French euros in foreign exchange markets:

a. A Canadian importer buys a shipload of Bordeaux wine.

b. An Italian automobile firm decides to make an assembly plant in Halifax.

c. A Canadian university student decides studying at the Sorbonne for one year.

d. A German manufacturer exports machinery through one French port to another on a Canadian freighter.

e. Spain incurs balance of payments deficit in its transactions along with France.

f. A Canadian government bond held through a French citizen matures and the loan amount is paid back to that person.

g. It is extensively believed that the international value of the euro will drop in the near future.

E

Expert

Verified

A demand for euro is made in (a), (c), and (f). A supply of euros is made in (b), (d), (e), and (g).

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