Macroeconomics 5th Edition by Olivier Blanchard

Exercise 1

Using the information in this chapter, label each of the following statements true, false, or uncertain. Explain briefly.
a. Britain's return to the gold standard caused years of high unemployment.
b. A sudden fear that a country is going to devalue may force an exchange rate crisis, even if the fear initially had no basis.
c. Because economies tend to return to their natural level of output in the medium run, there is a never a reason to devalue.
d. High labor mobility within Europe makes the euro area a good candidate for a common currency.
e. Changes in the expected level of the exchange rate far in the future have little effect on the current level of the exchange rate.