Final answer:
A weaker currency, such as the euro falling against the dollar, has different effects on various groups of people. European exporters, European tourists, and European investors in U.S. assets benefit from a weaker euro, while American importers and tourists face higher costs or expenses respectively. American exporters may face challenges due to their goods becoming relatively more expensive for European consumers.
Step-by-step explanation:
A weaker currency, such as the euro falling against the dollar, has different effects on different groups of people.
A) European exporters benefit, while American importers face higher costs:
When the euro falls against the dollar, it means that European goods become cheaper for American consumers. This benefits European exporters as they can sell their products at a more competitive price. However, American importers will have to pay more to purchase European goods, leading to higher costs for them.
B) European tourists benefit, while American tourists face higher expenses:
A weaker euro means that European tourists traveling to the United States will have more purchasing power, as their euros will be able to buy more dollars. On the other hand, American tourists traveling to Europe will face higher expenses, as their dollars will be able to buy fewer euros.
C) European investors in U.S. assets benefit, while American exporters may face challenges:
European investors who have invested in U.S. assets will benefit from a weaker euro as their returns will be higher when converted back to euros. However, American exporters may face challenges as their goods become relatively more expensive for European consumers, resulting in a potential decrease in demand.
D) Both A and B:
This option is incorrect because it combines the effects of A and B, which are mutually exclusive. European exporters benefit in option A, while European tourists benefit in option B.