The effects of 9/11 were a leftward shift in the AD curve and inflation;short-run output fell along the AS curve.

Question

Quizplus · Accepted Answer

The statement is true. The terrorist attacks of September 11, 2001, had significant economic effects, including a leftward shift in the aggregate demand (AD) curve due to lower consumer and business confidence, and a rise in inflation due to higher energy prices. In the short run, output fell along the aggregate supply (AS) curve, as businesses reduced operations and investment in response to the uncertainty and disruption caused by the attacks.

The Effects of 9/11 Were a Leftward Shift in the AD