Label each of the following statements true, false, or uncertain. Explain briefly.

a. If the nominal exchange rate is fixed, the real exchange rate is fixed.

b. When domestic inflation equals foreign inflation, the real exchange rate is fixed.

c. A devaluation is an increase in the nominal exchange rate.

d. Britain's return to the gold standard caused years of high unemployment.

e. A sudden fear that a country is going to devalue leads to an increase in the domestic interest rate.

f. A change in the expected future exchange rate changes the current exchange rate.

g. The effect of a reduction in domestic interest rates on the exchange rate depends on the length of time domestic interest rates are expected to be below foreign interest rates.

h. Because economies tend to return to their natural level of output in the medium run, it makes no difference whether a country chooses a fixed or flexible exchange rate.

i. High labor mobility within Europe makes the Euro area a good candidate for a common currency.

j. A currency board is the best way to operate a fixed exchange rate.