Use the following supply and demand graph for product X to answer the question below. 
What would happen if the government subsidized consumption of this product because it has positive externalities in consumption?
A. demand would increase
B. price would decrease
C. supply would increase
D. demand would decrease
Answer: A
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How can the Federal Reserve actually increase the money supply?
A) by delaying transfer of money among banks B) by purchasing more government bonds in the open market C) by doubling the reserve requirement D) by raising the discount rate
If national laws protecting the health and safety of workers completely eliminate any and all risk, then
A) more people would be employed. B) workers in risky occupations become better off. C) compensating differentials would grow because workers could not be compensated by being given lower risk jobs. D) compensating wage differentials disappear and workers in risky occupations may be no better off.
An increase in the price level that leads to no expansion of economic activity ________
A) is consistent with classical models B) implies that there has been no change in the money supply C) is a strictly short-run phenomenon D) all of the above E) none of the above
Suppose that there is an increase in the demand for money. What is the appropriate monetary policy response in the New Keynesian sticky price model?
A) an increase in the interest rate target B) no change in the interest rate target C) a decrease in the interest rate target D) an increase in government spending