1. The price at which the central bank provides reserves to the commercial banks is restricted by its target monetary policy rate.

Answer: True

2. A rising fiscal deficit is the signal that government policy is becoming more expansionary.

Answer: Maybe

3. When a nation's currency appreciates strongly its international competitiveness falls. In these situations, the only way to restore that competitiveness is to reduce the rate of growth in domestic wages and prices relative to our trading partners.

Answer: False