NORDLANDIA IS A COUNTRY WITH A DEVELOPED ECONOMY MAINTAINING ITS OW...

3.

Nordlandia is a country with a developed economy maintaining its own currency, the Nordlandian crown

(NLC), and whose most important export is domestically produced oil and natural gas. In a recent stress test

of Nordlandia's banking system, several scenarios were considered. Which of the following is most consistent

with being part of a coherent scenario?

a.

An increase in domestic inflation and appreciation of the NLC

b.

A significant increase in crude oil prices and a decrease in the Nordlandian housing price index

c.

A drop in crude oil prices and appreciation of the NLC

d.

A sustained decrease in natural gas prices and a decrease in the Nordlandian stock index