Praxis II Citizenship

Answer: D - If the dollar is strong compared to a weak euro, the person who most benefits from that exchange rate is the U.S. retailer who is importing food from Italy. If the euro is weak in Italy, the cost of their products will be lower. If the U.S. dollar is strong by comparison, then the United States can buy more. Therefore, the U.S. retailer who is acquiring goods benefits the most. The U.S. manufacturer exporting goods will not benefit as much because the country with which it is trading will have less purchasing power. There is no information in the question to indicate if China’s trade with both the United States and the Eurozone is profitable to China or not. If the Chinese renminbi is stronger than the U.S. dollar it may be benefitting the most; if it is equal to or weaker than the dollar, it likely isn’t faring as well.