Question

Is it better if the U.S. dollar rises in value—or if the U.S. dollar falls in value against other countries' currencies? The question is important because the U.S. Secretary of the Treasury occasionally has the Federal Reserve System intervene to raise or lower the U.S. dollar (Remember from Macro?) relative to other currencies. However, such interventions are controversial, it creates "consequences". We blame China for manipulating their currency (mainly keeping it low to help exports).

The answer to the question above is "Depends. Some will benefit and some will lose". Of the list of groups mentioned below, who would potentially gain and who would potentially lose if USD value gets stronger against their currencies or Euro? Explain each answer to get full credits. (1 point each - 6 points total)

1) Henri, the French man exporting wine to the U.S.

2) Firms exporting computers from the U.S. to Belgium.

3) German students studying in US

4) American consumers

5) An Italian textile firm about to build a factory in South Carolina

6) You are going to Europe for a vacation

Answer 1