True or False or uncertain 11. 12. 13. 14. A booming economy induces trade balance decits, which increase the likehood of devaluation (or depreciation). A currency could be overvalued if consumer prices are generally higher at home than abroad when compared in a common currency, or under valued if these prices are lower at home. The fact that there many theories of the current account is a great dis- advantage because it is very difcult to determine which theory is more important. Before an international bank grants a loan to a foreign government, it. must mainly consider the economic environment of the borrower coun- try