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Macroeconomic Events

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Please help me understand how macroeconomic events impact asset values in both the short and long run. Please include monetary and fiscal policy and shocks in the explanation.

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Solution Summary

This solution discusses the effect of macroeconomic events on the economy.

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Macroeconomic shocks refer to sudden changes that occur in a country's macroeconomic situation. It is an economic shock that manifests at the macroeconomic level. Macroeconomic shocks have strong impacts on where people will invest. They also have an effect on the wealth of those who buy and sell in these markets. Market shocks lead people to decide in the sector in which they invest. Macroeconomic shocks also determine where people will invest and what returns they will get for their investment. Macroeconomic shocks immediately after the purchase of assets will have long term effects on the value of assets purchased. Macroeconomic shocks long after the purchase of assets or close to the assets being written of have a short run effect on the value of the assets. The exogenous shock affects the ...

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