A firm has to decide between two projects that cost $10,000 each. Project A will provide a revenue $10,700 one year from now, while Project B will provide a revenue of $12,200 two years from now. The interest rate is 10% per year. This firm

When developing countries borrow in international credit markets, many find that they must borrow in currencies other than their own (such as dollars, yen, or euros). Why are international creditors willing to make loans in dollars, yen, or euros but not in the developing countries' currencies?

A) Lenders are not well-informed about developing countries' economic situations. B) Lenders believe that the currencies of developing countries will always appreciate. C) Lenders receive higher interest rates on loans in dollars, yen, or euros than on loans made in the currencies of developing countries. D) Lenders believe that developing countries have a history of weak macroeconomic management and imprudent monetary and fiscal policies.

The Fed influences the interest rate by using which of the following tools?

i. open market operations ii. taxes on bank accounts iii. changes in required reserve ratios A) i only B) ii only C) iii only D) Both i and iii E) i, ii and iii