What is the test for exhaustion in the context of the writ of habeas corpus?

As we explained in Batchelor v. Cupp, 693 F.2d 859, 862 (9th Cir.1982), cert. denied, --- U.S. ----, 103 S.Ct. 3547, 77 L.Ed.2d ---- (1983), the doctrine stems "from the basic principle of federalism that federal courts should accord due respect to the role of state courts in enforcing the prohibition against unconstitutional confinement embodied in the writ of habeas corpus. The exhaustion doctrine also serves the interests of judicial economy. State courts should have the first opportunity to examine the lawfulness of a state prisoner's confinement. If the prisoner's claim is meritorious, and if the state remedy is prompt and complete, there is no need to bring post-conviction proceedings in federal courts."