Bh Content - SPRING_2021 Be Content - SPRING_2021- Bb https://ucci.blackboard.co.. Paraphrasing Tool | QuillB CHAPTER 19 International Finance and the Foreign Exchange Market 11. (1). The U.S. trade deficit is a financial obligation of the federal government, and if it is not paid off, foreigners will be reluctant to loan money to the U.S. government. (II) When a nation runs a current account deficit due to a merchandise trade deficit, it must also be true that the nation has a surplus on its capital account due to an inflow of foreign capital. a. I is true; II is false. b. I is false; II is true. C. Both I and II are true. d. Both I and II are false. 12. For a country to successfully maintain a fixed exchange rate value of its currency relative to another cur- rency (for example, as is done when currencies are unified or pegged), it must a. maintain a relatively high rate of inflation. b. balance the government budget each year. c. give up the independence of its monetary policy. d. run a trade deficit. 13. An appreciation in the value of the U.S. dollar would. a. encourage foreigners to make more investments in the United States. b. encourage U.S. consumers to purchase more foreign-produced goods. c. increase the number of dollars that could be purchased with the euro. d. discourage U.S. consumers from traveling abroad. use a nation's currency to depreciate