Instructions: 0 Please, write your answers in a separate le (i.e. Word), save it as a PDF document and name it with your last name and your student ID number linked by an underscore (Lei Yourname,12345678ipdf)l 0 Answer a_ll questions. Clearly indicate which question each answer pertains to. I. True/ False/ Uncertain - Briey explain. No credit without an explanation (5 marks each). 1. pk OOKTQC\" Labour mobility and wage/ price exibility are needed for adjustment to temporary shocks in a mone- tary union. . The larger the internal sovereign debt, the more likely a sovereign default in a monetary union. . The Lender of Last Resort (LOLR) function of the central bank poses _risk. . Internal devaluation (i.e. lower wages / prices) is an alternative adjustment mechanism to an exchange rate devaluation . The European Central Bank (ECB) can achieve both stable inflation and nancial stability. . ECB should be less independent and more accountable to achieve its mission . Countries can run primary fiscal deficits while maintaining constant debt-toGDP ratios. . Integrated financial markets function as insurance against symmetric, systemic shocks