Exchange Rates

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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.