3. The Greek government-debt crisis started in late 2009 and forced the European Union, together with the European Central Bank, to adapt their policies in order to save Greece from bankruptcy.

a. What was the effect of the problems in Greece and other struggling Eurozone countries on the exchange rate of the euro and Eurozone’s economy?

b. Which monetary policy instruments did the ECB use to stabilize the economy and create demand?

c. Suppose that Greece leaves the Eurozone and has introduced the Greek drachma again. Describe some advantages and disadvantages.