The Dodd-Frank Act attempts to prevent future financial crises by making major changes to the U.S. financial system, including
A. paying banks interest on their reserve holdings.
B. increasing banks' reserve requirements.
C. reducing the interest rates banks can charge their customers for loans.
D. requiring the Federal Reserve to stress test banks' capital.
Answer: D
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Underlying economic theory is the idea that
A) people respond only to negative incentives, not to positive ones. B) choices are affected by both positive and negative incentives. C) value judgments do not play a role in the economic decisions people make. D) money is the only incentive that matters.
If a country allows trade and, for a certain good, the domestic price without trade is higher than the world price,
a. the country will be an exporter of the good. b. the country will be an importer of the good. c. the country will be neither an exporter nor an importer of the good. d. Additional information is needed about demand to determine whether the country will be an exporter of the good, an importer of the good, or neither.
All else constant, an increase in the supply of money will lead to _______
A) an increase in the equilibrium quantity of money and an increase in the equilibrium price of bonds. B) an increase in the equilibrium quantity of money and a decrease in the equilibrium price of bonds. C) a decrease in the equilibrium quantity of money and an increase in the equilibrium price of bonds. D) a decrease in the equilibrium quantity of money and a decrease in the equilibrium price of bonds.
We will definitely go bankrupt if we don't
A. refinance the national debt as the Treasury bills, notes, and bonds fall due. B. pay off the national debt within the next 20 years. C. reduce the size of the national debt. D. balance the budget.