Figure 4.3 illustrates the demand for tacos. Assume tacos are an inferior good. An increase in income would bring about a movement from

Suppose a government have a stated policy that it will not negotiate with hostage takers. Now someone is taken hostage, what would be the best policy for the government? Explain

What will be an ideal response?

An adverse supply shock causes output to

a. rise. To counter this a central bank would increase the money supply. b. rise. To counter this a central bank would decrease the money supply. c. fall. To counter this a central bank would increase the money supply. d. fall. To counter this a central bank would decrease the money supply.