PART I: TRUE/FALSE/UNCERTAIN QUESTIONS: (15) One of the striking regularities in the world economy is that rich coun- tries are "more expensive" than poor countries (i.e., that the cost of living is indeed higher in the rich countries than in the poorer coun- tries). One country will be more expensive than another if the price of its nontradable goods is higher than abroad. (16) In the article "Cross-Border Returns Differentials," the authors (S.E. Curcuru, T. Dvorak and F.E. Warnock) find strong evidence that the U. S. net external debt is financed by a persistent returns differential, the difference between the rate that the United States earns on its for- eign claims and the rate it pays on its foreign liabilities. (17) According to Rocard Hausmann (Should there Be Five Currencies or One Hundred and Five?, Fall 1999), countries with weak national cur- rencies would increase overall financial stability by abandoning national currencies altogether in favor of an international currency such as the dollar or a supranational currency such as the euro. (18) A more open economy gains less from output enhancing inflation (in- creases in money supply) than a more closed economy. Therefore, more open economies need have lower average inflation rates. (19) There should be global currency unification because the benefits from adopting a single world currency would far exceed the benefits of the current system of flexible exchange rates based on such major curren- cies as the dollar, yen, and euro. (20) A rise in the domestic interest rate relative to the foreign interest rate leads to an appreciation of the home currency. (6) Before the introduction of the euro in 1999, seiniorage (inflation tax) was more important source of revenue for Southern European countries than for Northern European countries