Question 1

When looking at the economic impact of the terrorist attacks, you will find that GDP

Accepted Answer

A) was negatively affected by increases in defense and homeland security expenditures. 
B) was unaffected by increases in defense and homeland security expenditures. 
C) was positively affected by increases in defense and homeland security expenditures. 
D) data collectors initially denied the authenticity of defense and homeland security expenditures. 
A) was negatively affected by increases in defense and homeland security expenditures. 
B) was unaffected by increases in defense and homeland security expenditures. 
C) was positively affected by increases in defense and homeland security expenditures. 
D) data collectors initially denied the authenticity of defense and homeland security expenditures.

Question 2

When looking at the economic impact of the increase in donations to relief agencies that resulted from the terrorist attacks, you will find that GDP

Accepted Answer

A) was negatively affected by this giving. 
B) was positively affected by this giving. 
C) was unaffected by this giving. 
D) calculations were outsourced to Bangladesh. 
A) was negatively affected by this giving. 
B) was positively affected by this giving. 
C) was unaffected by this giving. 
D) calculations were outsourced to Bangladesh.

Question 3

A "rational terrorist" will react to the increased security at U.S. airports by

Accepted Answer

A) attacking U.S. airports. 
B) ending all attacks. 
C) attacking other high value U.S. interests outside the U.S. 
D) attacking other highly defended targets. 
A) attacking U.S. airports. 
B) ending all attacks. 
C) attacking other high value U.S. interests outside the U.S. 
D) attacking other highly defended targets.

Question 4

Reinsurance is a common solution for insurance companies when the

Accepted Answer

A) uncertainty to homeowners is large but small for insurance companies. 
B) uncertainty to homeowners and insurance companies is small. 
C) uncertainty cannot be summarized actuarially. 
D) uncertainty to homeowners and insurance companies is large. 
A) uncertainty to homeowners is large but small for insurance companies. 
B) uncertainty to homeowners and insurance companies is small. 
C) uncertainty cannot be summarized actuarially. 
D) uncertainty to homeowners and insurance companies is large.

Question 5

In the context of auto theft, protecting one's own car with an anti-theft device has

Accepted Answer

A) the positive externality of making all cars safer. 
B) the negative externality of making other cars relatively more attractive to thieves. 
C) the positive externality of making other cars relatively more attractive to thieves. 
D) the negative externality of making all cars safer. 
A) the positive externality of making all cars safer. 
B) the negative externality of making other cars relatively more attractive to thieves. 
C) the positive externality of making other cars relatively more attractive to thieves. 
D) the negative externality of making all cars safer.

Question 6

The attacks of September 11, 2001 are a quintessential example of

Accepted Answer

A) a negative aggregate demand shock. 
B) a positive aggregate demand shock. 
C) a positive aggregate supply shock. 
D) the rebound effect. 
A) a negative aggregate demand shock. 
B) a positive aggregate demand shock. 
C) a positive aggregate supply shock. 
D) the rebound effect.

Question 7

Up until the occurrence of Hurricanes Katrina and Sandy, the worst insurance outcome in U.S. history was

Accepted Answer

A) Hurricane Andrew. 
B) the September 11th terrorist attack. 
C) the Northridge earthquake. 
D) the sinking of the Titanic. 
A) Hurricane Andrew. 
B) the September 11th terrorist attack. 
C) the Northridge earthquake. 
D) the sinking of the Titanic.

Question 8

Figure 48.1
-Using Figure 48.1, modeling the attacks of September 11, 2001 you would show the impact of reduced consumer confidence by using

Accepted Answer

A) Panel 1 only with a shift from ADA to ADB. 
B) Panel 1 only with a shift from ADB to ADA. 
C) Panel 2 only with a shift from ASA to ASB. 
D) Panel 1 to model the aggregate demand shock (ADB to AD
A) and Panel 2 to model the aggregate supply shock (ASB to AS
A) . 
A) Panel 1 only with a shift from ADA to ADB. 
B) Panel 1 only with a shift from ADB to ADA. 
C) Panel 2 only with a shift from ASA to ASB. 
D) Panel 1 to model the aggregate demand shock (ADB to AD
A) and Panel 2 to model the aggregate supply shock (ASB to AS
A) .

Question 9

A "rational terrorist" will react to the increased security at U.S. airports by

Accepted Answer

A) attacking U.S. airports. 
B) ending all attacks. 
C) attacking other targets that are as visible but less defended. 
D) attacking other highly defended targets. 
A) attacking U.S. airports. 
B) ending all attacks. 
C) attacking other targets that are as visible but less defended. 
D) attacking other highly defended targets.

Question 10

The total cost to the U.S. of a terrorist attack occurring on its soil is

Accepted Answer

A) best measured by the insurance claims, since those are the costs that must be explicitly paid in dollars. 
B) fully measured only by economic or opportunity costs, the highest valued opportunities foregone. 
C) poorly measured by economic or opportunity costs, since these are usually vague and subjective. 
D) fully and clearly recorded in the speeches of Osama bin Laden broadcast on Al Jazeera. 
A) best measured by the insurance claims, since those are the costs that must be explicitly paid in dollars. 
B) fully measured only by economic or opportunity costs, the highest valued opportunities foregone. 
C) poorly measured by economic or opportunity costs, since these are usually vague and subjective. 
D) fully and clearly recorded in the speeches of Osama bin Laden broadcast on Al Jazeera.

Question 11

When using the present value of lost earnings as your measure of the cost associated with a person's lost life, you will find that people

Accepted Answer

A) who do more socially useful work are valued the most. 
B) whose earnings are the highest are valued the most. 
C) who work the hardest are valued the most. 
D) with the most friends are valued the most. 
A) who do more socially useful work are valued the most. 
B) whose earnings are the highest are valued the most. 
C) who work the hardest are valued the most. 
D) with the most friends are valued the most.

Question 12

The Bali, Indonesia bombing by Al-Qaeda, which struck a U.S. target that was lightly defended, was an example of the "rational terrorist's"

Accepted Answer

A) diversion technique. 
B) marginalist technique. 
C) compression effect. 
D) substitution effect. 
A) diversion technique. 
B) marginalist technique. 
C) compression effect. 
D) substitution effect.

Question 13

The 2001 terrorist attack reduced U.S. aggregate demand in part because it led to

Accepted Answer

A) higher insurance premiums. 
B) more powerful labor unions in private industry. 
C) a decline in consumer confidence. 
D) lower oil prices. 
A) higher insurance premiums. 
B) more powerful labor unions in private industry. 
C) a decline in consumer confidence. 
D) lower oil prices.

Question 14

The attempt by Al-Qaeda terrorists to board a train between Belgium and France with machine guns was an example of the "rational terrorist's"

Accepted Answer

A) diversion technique. 
B) marginalist technique. 
C) compression effect. 
D) substitution effect. 
A) diversion technique. 
B) marginalist technique. 
C) compression effect. 
D) substitution effect.

Question 15

The Paris Bataclan massacre by Al-Qaeda, which struck a French target that was lightly defended, was an example of the "rational terrorist's"

Accepted Answer

A) diversion technique. 
B) marginalist technique. 
C) compression effect. 
D) substitution effect. 
A) diversion technique. 
B) marginalist technique. 
C) compression effect. 
D) substitution effect.

Question 16

To estimate the cost of the September 11, 2001 terrorist attacks, which of the following concepts would be used to calculate the value of lost lives?

Accepted Answer

A) The present value of lost earnings 
B) The total value of lost earnings 
C) The concept of acceptable risk 
D) The fallacy of composition 
A) The present value of lost earnings 
B) The total value of lost earnings 
C) The concept of acceptable risk 
D) The fallacy of composition

Question 17

If the September 11th terrorist attacks had not occurred, it is unlikely that the war in Iraq would have

Accepted Answer

A) occurred at all. 
B) been so protracted. 
C) uncovered so many weapons of mass destruction. 
D) divided Congress as it did. 
A) occurred at all. 
B) been so protracted. 
C) uncovered so many weapons of mass destruction. 
D) divided Congress as it did.

Question 18

If both Real GDP and the general price level fell following the September 11th terrorist attack,

Accepted Answer

A) the negative aggregate supply shock was smaller than the negative aggregate demand shock. 
B) the negative aggregate supply shock was larger than the negative aggregate demand shock. 
C) the aggregate supply shock was negative, but the aggregate demand shock must have been positive. 
D) both the aggregate supply shock and the aggregate demand shock must have been, ironically, positive. 
A) the negative aggregate supply shock was smaller than the negative aggregate demand shock. 
B) the negative aggregate supply shock was larger than the negative aggregate demand shock. 
C) the aggregate supply shock was negative, but the aggregate demand shock must have been positive. 
D) both the aggregate supply shock and the aggregate demand shock must have been, ironically, positive.

Question 19

Al-Qaeda operatives claimed that the September 11th terrorist attacks inflicted damage upon the U.S. of

Accepted Answer

A) almost $1 million. 
B) between $1 billion and $10 billion. 
C) between $10 billion and $100 billion. 
D) more than $1 trillion. 
A) almost $1 million. 
B) between $1 billion and $10 billion. 
C) between $10 billion and $100 billion. 
D) more than $1 trillion.

Question 20

To maximize progress toward a political goal, the "rational terrorist" will always choose those actions for which the

Accepted Answer

A) marginal benefit equals or exceeds the marginal cost. 
B) most people die. 
C) fewest innocent people die. 
D) most money is lost. 
A) marginal benefit equals or exceeds the marginal cost. 
B) most people die. 
C) fewest innocent people die. 
D) most money is lost.

Exam 48: The Economics of Terrorism

When looking at the economic impact of the terrorist attacks, you will find that GDP

When looking at the economic impact of the increase in donations to relief agencies that resulted from the terrorist attacks, you will find that GDP

A "rational terrorist" will react to the increased security at U.S. airports by

Reinsurance is a common solution for insurance companies when the

In the context of auto theft, protecting one's own car with an anti-theft device has

The attacks of September 11, 2001 are a quintessential example of

Up until the occurrence of Hurricanes Katrina and Sandy, the worst insurance outcome in U.S. history was

Figure 48.1 -Using Figure 48.1, modeling the attacks of September 11, 2001 you would show the impact of reduced consumer confidence by using

A "rational terrorist" will react to the increased security at U.S. airports by

The total cost to the U.S. of a terrorist attack occurring on its soil is

When using the present value of lost earnings as your measure of the cost associated with a person's lost life, you will find that people

The Bali, Indonesia bombing by Al-Qaeda, which struck a U.S. target that was lightly defended, was an example of the "rational terrorist's"

The 2001 terrorist attack reduced U.S. aggregate demand in part because it led to

The attempt by Al-Qaeda terrorists to board a train between Belgium and France with machine guns was an example of the "rational terrorist's"

The Paris Bataclan massacre by Al-Qaeda, which struck a French target that was lightly defended, was an example of the "rational terrorist's"

To estimate the cost of the September 11, 2001 terrorist attacks, which of the following concepts would be used to calculate the value of lost lives?

If the September 11th terrorist attacks had not occurred, it is unlikely that the war in Iraq would have

If both Real GDP and the general price level fell following the September 11th terrorist attack,

Al-Qaeda operatives claimed that the September 11th terrorist attacks inflicted damage upon the U.S. of

To maximize progress toward a political goal, the "rational terrorist" will always choose those actions for which the

Economics: the Study of Opportunity Cost

Supply and Demand

The Concept of Elasticity and Consumer and Producer Surplus

Firm Production, Cost, and Revenue

Perfect Competition, Monopoly, and Economic Versus Normal Profit

Every Macroeconomic Word You Ever Heard: Gross Domestic Product, Inflation, Unemployment, Recession, Depression

Interest Rates and Present Value

Aggregate Demand and Aggregate Supply

Fiscal Policy

Monetary Policy

Federal Spending

Federal Deficits, Surpluses, and the National Debt

The Housing Bubble

The Recession of 2007-2009: Causes and Policy Responses

Is Economic Stagnation the New Normal

Is the Fiscalsky Falling: An Examination of Unfunded Social Security, Medicare, and State and Local Pension Liabilities

International Trade: Does It Jeopardize American Jobs

International Finance and Exchange Rates

The European Debt Crisis

Economic Growth and Development

Nafta, Gatt, Wto: Are Trade Agreements Good for Us

The Line Between Legal and Illegal Goods

Natural Resources, the Environment, and Climate Change

Health Care

Government-Provided Health Insurance: Medicaid, Medicare, and the Child Health Insurance Program

The Economics of Prescription Drugs

So You Want to Be a Lawyer: Economics and the Law

The Economics of Crime

Antitrust

The Economics of Race and Discrimination

Income and Wealth Inequality

Farm Policy

Minimum Wage

Ticket Brokers and Ticket Scalping

Rent Control

Economics of K-12 Education

Economics of College and University Education

Poverty and Welfare

Head Start

Social Security

Personal Income Taxes

Energy Prices

If We Build It, Will They Come and Other Sports Questions

The Stock Market Crashes

Unions

Walmart: Always Low Prices and Low Wages- Always

The Economic Impact of Casino Gambling

Filters

If the September 11^th terrorist attacks had not occurred, it is unlikely that the war in Iraq would have

If both Real GDP and the general price level fell following the September 11^th terrorist attack,