Question

The target federal funds rate is set by the

Multiple Choice

• Chairperson of the Federal Reserve Board.

• Secretary of the Treasury.

• Federal Open Market Committee.

• President of the United States

2.

How do the suppliers of capital and the users of capital connect?

Multiple Choice

• Through the use of a financial intermediary

• Through the Fed discount window

• Through private one-on-one transactions

• Through government agencies

3.

Suppose the price of one share of a particular stock rose from $9.00 to $9.15 over the course of a year, and the stock paid a dividend of $0.60 per share during the same year. What was the total return on the share of stock?

Multiple Choice

• 8.3 percent

• 6.7 percent

• 25.0 percent

• 1.7 percent

Answer 1

1) The federal funds rate is set by the Fed's monetary policymaking body - Federal Reserve Open Market Committee

option(C)

2) The suppliers of capital and the users of capital connect through the financial intermediary

as the consumers are the suppliers who save and deposit their money whereas the users of capital are the firms who borrow these funds for investment.

option(A)

3) Total return: (9.15-9) + 0.60/9

0.75/9*100

=8.3%

option(A)