--%>

Depreciation of the euro change the dollar price

If the European euro declines in value (depreciates) in the foreign exchange market, would it be easier or harder for the French to sell their wine in the United States?  Suppose you were planning a trip to Paris.  How would the depreciation of the euro change the dollar price of this trip?

E

Expert

Verified

If the European euro declines in value, it means that Americans can receive more francs for each dollar. Therefore, they do not need as many dollars to pay the franc price of a bottle of French wine, so the quantity demanded would rise and it should be easier to sell French wine in the U.S.  Likewise, the franc depreciation would make it less costly for Americans to travel in France, since the dollar would now buy more francs (assuming that prices inside France have not risen to entirely offset the depreciation of the franc).

   Related Questions in Business Economics

  • Q : Affluence tomorrow requires sacrifice

    Explain:  “Affluence tomorrow requires sacrifice today.”

  • Q : What do you mean by Shuffling the Deck

    What do you mean by Shuffling the Deck?

  • Q : Scientific method how does it relate to

    What is the scientific method and how does it relate to theoretical economics?  What is the difference between a hypothesis and an economic law or principle?

  • Q : Describe redistributive effects of

    Describe redistributive effects of inflation?

  • Q : Gains from Exchange- Practice and

    When a world famous concert pianist is as well the world's fastest short order cook, he would most likely gain the most financially through devoting: (i) Full time to frying burgers (ii) Full time to piano practice and concerts. (iii) Half-time cooking and half-time p

  • Q : Calculate the short-run profit or loss

    A perfectly competitive firm produces 3,000 units of a good at a total cost of $36,000. The cost of each good is $10. Calculate the firm's short-run profit or loss. w) loss of $6,000. x) profit of $6,000. y profit of $30,000. z) There is insufficient

  • Q : Cooperative and non-cooperative outcome

    Question: Cineplex and AMC are two rival movie theatre chains. They must each decide whether to set an admission price of $10 or set an admission price of $12; of course, the number of movie goers (and thus their r

  • Q : Distribution of endowments 1. We have

    1. We have discussed the importance of resource endowments and institutions for an economy's successful development. a. In this game, what are the resources that make up the endowments, and what defines a given player's endowment o

  • Q : Who define economics as a subset of

    Economists who viewed economics like a subset of jurisprudence combined: (1) John Stuart Mill. (2) Alfred Marshall. (3) Karl Marx. (4) William Stanley Jevons. (5) Adam Smith. Hey friends please give your opinion fo

  • Q : Exploit consumers in highly competitive

    This is difficult for firms within highly competitive markets to exploit consumers since: (i) consumer advocates organize boycotts that generate bad publicity. (ii) market pressures force fair distributions of products. (iii) the government sets price