ECONOMICS
FEDERAL RESERVE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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1, 2, and 3
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none of the above
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all of the above
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1 and 2 only
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3 and 4 only
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Detailed explanation-1: -Terrorist acts can cause ripple effects through the economy that have negative impacts. The most obvious is the direct economic destruction of property and lives. Terrorism indirectly affects the economy by creating market uncertainty, xenophobia, loss of tourism, and increased insurance claims.
Detailed explanation-2: -The real GDP growth forecast fell from 3.5% to 2.7% over the first nine months of 2001. The 9/11 attack produced an immediate dramatic revision in this forecast from 2.7% to 1.2%, and the forecast was further revised downward in November by –0.75%.
Detailed explanation-3: -In general, after terrorist acts, people suffer from post – traumatic stress disorders, anxiety and major depression. Additionally, survivors of terrorist attacks are more vulnerable to substance abuse issues and psychosomatic symptoms after an attack.
Detailed explanation-4: -That surprise assault on Sept. 11, 2001, destroyed the twin towers of the World Trade Center, badly damaged the Pentagon and left some 3, 000 Americans dead.