How actual potential and short-run output are affected, Macroeconomics

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How actual potential and short-run output are affected

Problem

Natural disasters: Suppose a large earthquake destroys many houses and buildings on the West Coast but fortunately results in little loss of life. Show how to think about this event using the IS curve. Explain how actual output, potential output, and short-run output are affected in the short run, and why.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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Macroeconomics: How actual potential and short-run output are affected

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