Consider the Economic Effects of the September 11, 2001 Terrorist

question 21

Multiple Choice

Consider the economic effects of the September 11, 2001 terrorist attacks.Which of the following statements is correct?

• A)Reconstruction would lead to an increase in GDP.
• B)Increased government spending on relief efforts in the U.S.would decrease GDP.
• C)Lost items and buildings would lead to a decrease in GDP.
• D)U.S.well-being was improved, despite the loss in GDP.

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Definitions:

Normally Distributed

A statistical term that describes a bell-shaped frequency distribution that is symmetric about the mean, used in various financial models to assume the distribution of returns or asset prices.

Risk-Adjusted Returns

Performance measurement that evaluates the return gained from an investment relative to the risk taken, often calculated using measures such as the Sharpe ratio.

Small Firms

Companies with a relatively small market capitalization.

Large Firms

Corporations or companies that have a significant market capitalization, extensive operations, and a widespread influence in their industries.