AICPA Exam CPA-Business Topic 2 Question 79 Discussion

Actual exam question for AICPA's CPA-Business exam

Question #: 79
Topic #: 2

[All CPA-Business Questions]

To address the problem of a recession, the Federal Reserve Bank most likely would take which of the following actions?

ALower the discount rate it charges to banks for loans.

BSell U.S. government bonds in open-market transactions.

CIncrease the federal funds rate charged by banks when they borrow from one another.

DIncrease the level of funds a bank is legally required to hold in reserve.

Show Suggested Answer

Suggested Answer: C

Choice 'c' is correct. Return on investment equals net income divided by average invested capital:

Choices 'a', 'b', and 'd' are incorrect, per the above calculation.

by Chantell at Dec 22, 2023, 12:59 AM

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