1) Stabilization policies seek to bring unsustainable balances in a country's current account back into balance by reducing demand for goods in the economy, while structural adjustment seeks to improve long term growth prospects to address unsustainable balance of payment deficits (True or False and why?)

2) An increase in oil prices for a developing economy that imports all its oil can be expected to cause depreciation of the country's local currency (hint: consider the effects using the Supply-Demand framework for examining exchange rates). (T/F and why?)