A stress test of banks, such as that undertaken in the Spring of 2009, is designed to:
A) ensure that banks have followed proper accounting standards
B) make sure that banks are properly managed
C) gauge how well banks would fare if the economy worsens
D) estimate the impact of a bank panic on the overall economy
C
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Suppose firms in a monopolistically competitive industry are currently earning short-run economic profit. In the long run, the demand curve facing each individual firm is likely to:
a. shift to the left and become flatter. b. shift to the left and become steeper. c. shift to the right and become flatter. d. shift to the right and become steeper. e. remain unchanged.
All economic questions arise from the fact that resources are scarce
Indicate whether the statement is true or false
The IS—LM model predicts that a temporary beneficial supply shock
A) increases output, national saving, and investment, but not the real interest rate. B) increases output, national saving, and the real interest rate, but not investment. C) increases the real interest rate, investment, and output, but not national saving. D) increases output, national saving, investment, and the real interest rate.
Think of the quantity theory of money: If V = 5, P = 100, and Q = 10, then M is
a. 20 b. 10 c. 500 d. 1,000 e. 200