Incidents that have had major economic impacts Coursework

Incidents that have had major economic impacts - Coursework ExampleThe attack had dreaded consequences on both unite demand (AD) and aggregate supply (AS) of goods and services. Closure of the stock market and last advisories both within and outside the state of matter cut business activities leading to a drop in the GDP. AD curve shifted to the right giving rise to prices that ultimately leads to expected future inflation. At this point, aggregate supply shifts to the left in the short run until GDP surpasses its long-term average.The attack prompted the acres to emit one of its greatest consumption programs on September 20, 2001 after President Bush declared state of war on terror. Operations in Afghanistan would cost the treasury massive amounts in expenditure. According to Carter and Cox, 2011, the giving medication worn out(p) an estimated $3.3 trillion in response to the threat. America invested extensively on the Department of Defense (DOD) and operations of the sauci ly created native land warranter department. The federal government channeled funds to the defense spending both in Afghanistan and homeland security surveillance including intelligence details (Makinen, 2011).High expenditure by the DOD and homeland security initiated a debt crisis in the country. The amount of funds usable in driving stimulus programs in the country reduced with the increase of expenditure on security. High debt levels experienced in America because of increased expenditure after 9/11 were among the forces that prompted the 2008 crisis. Limited Medicare benefits caused a downgrading of the countrys debt.Fiscal policy touched interest rates, government expenditure strategy and tax rates. The US government, therefore, used borrowing from the federal government to help restore the adversely affected airline sector. America used automatic in-built stabilizer to restore its economy after the incidence. Corporations received tax relief that enabled them to acquire fu nds to help rebuild the countrys