3. Charles Engel, in his article \"Currency Misalignments and Optimal Monetary Policy: A Reexamination,\" points out the implications for monetary policy when currency misalignments are possible. According to the author, which of the following is true? A. Currency misalignments can be very large even in advanced economies. B. Currency misalignments lead to inefcient allocations for reasons that are analogous to the problems with ination. C. When there are currency misalignments, households in the Home and Foreign countries may pay different prices for the identical good. D. Currency misalignments lead to a reduction in world welfare. E. All of the above. Pierre-Olivier Gourinchas and Helene Rey (2007), in their article \"In- ternational Financial Adjustmen ,\" explore the impact of exchange rate movements on U.S. foreign debt. Which of the following are pointed out by the authors? A. In the short run, a dollar depreciation favors trade surpluses, hence contributing to the international adjustment via the \"trade channel.\" B. In the Long run, a dollar depreciation raises the value of foreign assets held by the United States relative to the liabilities, hence con- tributing to the process of international adjustment via the \"valuation channel\" C. The U.S.'s nancial position with the rest of the world may be less worrisome than it appears. D. Only (A) and (B) of the above E. None of the above