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What would happen to us exports of industrial machinery

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Reference no: EM131155100

Direct and Indirect Exchange Rates

Consider the following data involving trade between the U.S. and France:

Product

Domestic Price

January 1, 2011: US$1 = 1.033 Euros

January 1, 2012: US$1 = 1.064 Euros

U.S. exports industrial machinery

$100,000

(a)

(c)

French grapes agricultural products

 €960,000

(b)

(d)

a - d. Fill in the values in the table above.

e. Explain what would happen to U.S. exports of industrial machinery to France and U.S. imports of grapes from France as a result of the exchange rate change from 2011 to 2012. Minimum of 200 words.

Reference no: EM131155100

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