2.

The reason the country of Ecuador has adopted the use of the US dollar for transactions within the country is

	a.	to be able to lower taxes
	b.	to increase government revenues
	c.	to credibly commit to minimize inflationary pressures in the country
	d.	to be able to effectively implement monetary policy

3.

1. For a firm, the Optimal Capital Structure means to choose between equity and bonds so to

   	a.	Maximize funding needs
   	b.	Minimize the firm financing costs
   	c.	Minimize the firm available funding
   	d.	Maximize revenues

4.

1. In the US, the entity that may function as a "Lender of Last Resort" for financial institutions, is

   		the Federal Reserve
   		Citibank
   		the US Treasury
   		All of the above

5.

The Fed Funds rate

	a.	is the interest rate the Fed charges commercial banks
	b.	is the interest rate a commercial bank charges another for overnight loans and can be indirectly targeted by the Fed
	c.	is the interest rate paid by US Treasury bonds
	d.	is the interest rate the US government charges borrowers