Use the figure below to answer the following question. 
The case of substitute goods is represented by figure
A. 1.
B. 2.
C. 3.
D. 4.
Answer: D
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If the Fed wishes to reduce nominal interest rates, it must engage in an open market ________ of bonds to ________ the money supply.
A. sale; decrease B. purchase; decrease C. sale; increase D. purchase; increase
The total amount of producer surplus in a market is equal to the area below the supply curve
Indicate whether the statement is true or false
One way to make consumers take a negative externality into account in their demand decision is to:
A. give suppliers a production credit. B. subsidize the purchase of the item. C. place a tax on the item. D. None of these statements is true.
The presence of a price control in a market for a good or service usually is an indication that
a. an insufficient quantity of the good or service was being produced in that market to meet the public's need. b. the usual forces of supply and demand were not able to establish an equilibrium price in that market. c. policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers. d. policymakers correctly believed that price controls would generate no inequities of their own once imposed.