What is the primary objective of the Financial Stability Oversight Council?
What will be an ideal response?
The objective of the council is to avoid situations in which the insolvency of one large financial firm threatens the stability of the financial system.
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In the Cournot model of oligopoly:
A. firms produce differentiated products and set their prices simultaneously. B. firms produce homogenous products and set their prices simultaneously. C. firms choose how much to produce simultaneously and the price clears the market given the total quantity produced. D. firms choose how much to produce and the price to charge simultaneously.
How does a subsidy influence producer efficiency?
a. It encourages producers to produce above the efficient production level. b. It encourages producers to produce at peak efficiency levels. c. It encourages producers to produce below the efficient production level. d. It encourages producers to produce only after the subsidy funds are used up.
The theory of bounded rationality, based on rules of thumb such as "the value of a product is indicated by its price," may result in:
A. diminishing marginal utility. B. an upward-sloping supply curve. C. an upward-sloping demand curve. D. constant marginal utility.
Consider a market that is in equilibrium. If it experiences a decrease in demand, what will happen? The demand curve will shift to the:
A. left, and the equilibrium price will increase and the equilibrium quantity will decrease. B. left, and the equilibrium price and quantity will fall. C. left, and the equilibrium price and quantity will rise. D. right, and the equilibrium price and quantity will fall.