4. From an initial position of long-run equilibrium for the economy, describe the short- run and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
4. From an initial position of long-run equilibrium for the economy, describe the short- run and long-run macroeconomic impact on output, inflation, and real interest rates of a surprise terrorist attack that destroys several large factories in a given country. Start your answer with a brief indication of its likely impact on potential output. In your answer. you should use the aggregate-demand, aggregate supply model developed in this course. Also assume that the Fed implicitly allows its target rate of inflation to change. For extra credit discuss how your answer would be modified if the terrorist attack resulted in the destruction of several factories in foreign countries as well as at home. 4. From an initial position of long-run equilibrium for the economy, describe the short- run and long-run macroeconomic impact on output, inflation, and real interest rates of a surprise terrorist attack that destroys several large factories in a given country. Start your answer with a brief indication of its likely impact on potential output. In your answer. you should use the aggregate-demand, aggregate supply model developed in this course. Also assume that the Fed implicitly allows its target rate of inflation to change. For extra credit discuss how your answer would be modified if the terrorist attack resulted in the destruction of several factories in foreign countries as well as at home.
Expert Answer:
Answer rating: 100% (QA)
When a surprise terrorist attack destroys several large factories in a country it will likely have a significant negative impact on potential output P... View the full answer
Related Book For
Fundamentals of Physics
ISBN: 978-0471758013
8th Extended edition
Authors: Jearl Walker, Halliday Resnick
Posted Date:
Students also viewed these economics questions
-
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
The built-up shaft is designed to rotate at 450 rpm. If the radius of the fillet weld connecting the shafts is r = 13.2 mm, and the allowable shear stress for the material is Ï allow = 150 MPa,...
-
Define classical variables sampling and non statistical sampling. Are these methods viable options to monetary unit sampling?
-
A 9.50 g bullet has a speed of 2.10 km/s . What is its kinetic energy in joules? What is the bullet's kinetic energy if its speed is halved? What is the bullet's kinetic energy if its speed is...
-
Using the results from Problem 10.10, derive the equations for both parts of the off-axis complex modulus, \(E_{x}^{*}=E_{x}^{\prime}\left(1+i \eta_{x} ight)\), for an arbitrary angle \(\theta\);...
-
A balance sheet contains the following classifications: (a) Current assets (b) Investments (c) Property, plant, and equipment (d) Intangible assets (e) Other noncurrent assets (f) Current liabilities...
-
What is your understanding of the relevance of research within forensic psychology? Describe how the three basic research designs could be used in forensic psychology research. Explain the strengths...
-
Consider the problem of finding the shortest path between two points on a plane that has convex polygonal obstacles as shown in Figure 3.31. This is an idealization of the problem that a robot has to...
-
A negative cash flow to stockholders indicates a firm: had a net loss for the year. had a positive cash flow to creditors. O paid dividends that exceeded the amount of the net new equity. repurchased...
-
Julie drives \(100 \mathrm{mi}\) to Grandmother's house. On the way to Grandmother's, Julie drives half the distance at \(40 \mathrm{mph}\) and half the distance at \(60 \mathrm{mph}\). On her return...
-
A randomly selected home has a 32% chance of having a fireplace. If you randomly select records for 12 homes, what is the probability that: (a) exactly 4 have a fireplace? (b) at least 7 have a...
-
P(E|A) Find the indicated probabilities by referring to the given tree diagram and by using Bayess Rule. A P(A) = 0.2 P(E|A)=0.6 E P(ECA) = 0.4 -EC P(B) = 0.55 P(E|B)=0.7 -E B EC P(E|B) = 0.3 P(C) =...
-
A Thomson's gazelle can run at very high speeds, but its acceleration is relatively modest. A reasonable model for the sprint of a gazelle assumes an acceleration of \(4.2 \mathrm{~m} /...
-
Show that a gauge transformation of the 4-vector potential \(A^{\mu}\) leaves the Maxwell field tensor \(F^{\mu v}\) invariant.
-
Figure 10.9 is an example of a social network graph. Use the Girvan-Newman approach to find the number of shortest paths from each of the following nodes that pass through each of the edges. (a) A...
-
Is times interest earned meaningful for utilities? Why or why not?
-
The linear density of a string is l6 x 10-4 kg/m. A transverse wave on the string is described by the equation y = (0.021 m) sin [(2.0m-1)x + (30 s-1)t]. What are? (a) The wave speed and (b) The...
-
How many electrons would have to be removed from a coin to leave it with a charge of + 1.0 x 10-7 C?
-
Frank D. Drake, an investigator in the SETI (Search for Extra-Terrestrial Intelligence) program, once said that the large radio telescope in Arecibo, Puerto Rico (Figure), "can detect a signal which...
-
If task A is an immediate predecessor of task B, what must be true about the sched- uled timing of these two tasks?
-
Why does a project necessarily have to possess some form of deadline? What is the implication of a project without a deadline?
-
What are the likely consequences to managing a highly uncertain project in the predictive style of project management?
Study smarter with the SolutionInn App