B A The Economics of Terrorism On 11 September 2001, terrorists hijacked commercial airliners in the US and turned them into weapons Two of th Assignment 2.jpg hed into the World Trade Center in New...

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Extracted text: B A The Economics of Terrorism On 11 September 2001, terrorists hijacked commercial airliners in the US and turned them into weapons Two of th Assignment 2.jpg hed into the World Trade Center in New York City. Of the 50 000 people who worked in the twin towers each day, an estimated 3000 perished in the attack. The world will never be the same-politically, economically, militarily, and socially-as a result of this attack on the world's most powerful nation. Sept. 17: Stock prices plunge 684.81 points after trading resumes following longest shutdown of NYC stock exchange since the Depression. Sept. 24: Markets rebound Monday following stock markets' worst week since 1933. Sept. 21: Dow closes at post-attack low of 8235.81. Evidence indicates that the terrorists planned and executed their suicide missions carefully. It appears that their targets were specifically chosen to cause as much pain and suffering as possi- ble, to attack important symbols of American strength and power, and, ultimately, to have maximum nega- tive impact on global economic systems. Stock markets around the world experienced a sharp decline as a result of the attack and its destabilization of investor confidence. The recovery was slow and fragile. Sept. 19: Central banks pump billions of dollars in loans into economy in order to calm panic. Sept. 28: President Bush approves $15-billion bailout of crippled airline industry; Air Canada seeks $4-billion aid package from Ottawa. Chapter Goals QUESTIONS By the end of this chapter, you will be able to 1. What was the symbolic significance of a successful terrorist attack on the World Trade Center? 2. Explain the economic significance of the changes in stock market prices illustrated by the graph above. 3. The short-term consequences of the attack appear significant. Do you expect the long-term effects to be as significant? Explain. • realize the importance of economics as a social science, • understand how an economy works, • begin thinking like an economist, • use models to explore basic economic laws and fallacies, explore career opportunities in the field of economics.