A depreciation of the dollar means that the dollar loses value compared to other currencies. This situation generally benefits exporters and harms importers. Let's analyze each option:
a. A Saudi Arabian prince exporting oil to the United States - He would benefit because the price of oil in dollars would increase with a weaker dollar, making it more profitable for him.
b. A U.S. importer of Russian vodka - This individual would be harmed by a depreciation of the dollar because the cost of importing vodka would increase in dollar terms.
c. A U.S. tourist traveling in Europe - The tourist would be negatively affected as the cost of goods and services in Europe would be higher when converted from dollars to euros.
d. An Italian importer of U.S. steel - This importer would benefit from a weaker dollar because the cost of imported U.S. steel would decrease in euro terms.
e. A French exporter of wine to the United States - This exporter would be harmed because the amount of dollars received for the wine would be smaller when the dollar depreciates.
Based on this analysis, the correct answers are:
- a. a Saudi Arabian prince exporting oil to the United States
- d. an Italian importer of U.S. steel
1 answer