The tendency of people to overestimate the value of their possessions when, say, considering such value for insurance purposes is known in prospect theory as the:

Look at the above figure. Suppose the economy was initially in equilibrium at point A. What point would represent the short-run equilibrium if the Fed makes an open market purchase of bonds?

A) A B) B C) C D) D

The ability to use the too-big-to-fail policy was curtailed by the passage of the FDICIA

To use this action today, the FDIC must get approval of a two-thirds majority of both the Board of Governors of the Federal Reserve and the directors of the FDIC and also the approval of the A) Secretary of the Treasury. B) Senate Finance Committee Chairperson. C) President of the United States. D) governor of the state in which the failed bank is located.