Give an example of an event or incident that has taken place in the U.S. economy

Question

Give an example of an event or incident that has taken place in the U.S. economy which has a major economic impact--be specific, e.g., 9/11 attack, natural disaster, rise or fall in oil prices due to OPEC policies, consumer optimism or pessimism about an expected economic expansion or downturn, increase in government spending on healthcare, tightening of the legal and institutional environment, and so forth. What effect would this event have on AD or AS, other things being constant? What would be the resulting effect on equilibrium price level? Explain. What will be the effect of the different tools of fiscal policy to stabilize the economy? Give an example of a built-in stabilizer and explain how it would work to reduce this rise or fall in the level of AD. please help. no copy and paste from google

Explanation / Answer

One of the recent news that demonstrates the after effects of the low quality is related to the oil spill in the Gulf of Mexico. The company concerned with the spill was British Petroleum.

BP PLC's Macondo well blew for nearly 3 months starting from April 20, 2010, when the explosion on the Deep water Horizon drilling rig killed 11 workers.

There was a complete research on the accident related to the quality and hence the cost that the environment is paying. According to the research done by Texas A&M-Corpus Christi, the accident destroyed complete life in and around the site of the accident. Most of the tiny animals living on the sea floor have vanished and the effect can be seen up to 60 square miles. Within the 9 square miles, no animals could survive. The effect could be seen for decades and the recovery of the animals in the zone would be very slow. Most of the species would take decades to be regenerated in these areas and till that time the area would be inhabitable. This was the magnitude of the disaster.

This study was conducted to calculate the damages that the company must pay for the low quality. National Oceanic and Atmospheric Administration and with NOAA scientists are working together to found of

different ways so the area can be made more habitable in the near future.
It is proved that the company did not take complete precautions in the journey and hence there was as litigation against the company. The company did not use the best quality containers for the oil storage and even the process of oil storage was under consideration for defects.

The containers are found to be defective and this kind of accident was waiting to happen. The persons on the ship did not even alert anyone when the spill started. They took it casually to be the normal spill.

Even though the company is being considered as one of the best in terms of the quality, the demonstration of such low quality logistics was disastrous. The cost that the company would be paying or the loss that the company had was nothing as compared to the cost that the environment would be paying for decades.

As per the report, more than 102 sea species have been eliminated in the process and many more are on the verge of extinction in that area. The cost of the spill was not on the shallow waters but the effect can be seen in deep waters also.
Because of this supply decreased and AS curve moved towards the right.

The equilibrium price increased for the short term and hence for the country with higher oil imports started having fiscal deficits.

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