Recall the Application about how policymakers use stress tests to protect the financial system to answer the following question(s).According to this Application, after the financial crisis of 2008, former Treasury Secretary Timothy Geithner and his staff made a proposal that major banks and financial institutions be subjected to:
A. yearly audits.
B. stress tests.
C. regulation by Congress.
D. None of these.
Answer: B
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The larger the fraction of an investment financed by borrowing
A) the greater the potential return and the smaller the potential loss on that investment. B) the smaller the potential return and potential loss on that investment. C) the greater the potential return and potential loss on that investment. D) the smaller the potential return and the greater the potential loss on that investment.
An effective import quota will
a. increase the revenue received by the exporting nation b. eliminate all incentives for trade between nations c. reduce the quantity demanded of the imported good d. lead to a lower domestic price e. lead to a higher price in the exporting nation
Quantify the cost savings associated with a cost-effective abatement allocation achieved through trading.
Suppose two point sources are discharging phosphorus into Wisconsin’sFox River and face the following abatement costs for this pollutant: Point Source 1: TAC1 = 500 + 0.35(A1)2 MAC1 = 0.7A1 Point Source 2: TAC2 = 750 + 1.05(A2)2 MAC2 = 2.1A2, where A1 and A2 represent the abatement of phosphorus effluents in pounds by Source 1 and Source 2, respectively, and TAC and MAC are measured in hundreds of dollars. Assume that the state environmental authority has set the total maximum daily load (TMDL) for the Fox River. To achieve this limit, 40 pounds of phosphorus must be abated across the two point sources. Use this information to answer the following questions.
As a result of the decrease in the price of hamburger, consumers buy more hamburger and fewer frankfurters. This is an illustration of:
a. The income effect b. The substitution effect c. Consumer sovereignty d. Changing tastes and preferences