Terrorism is extremely harmful both society and economically.
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Theoretically, terrorism endangers life, leading to a reduction in the value of the future relative to the present. Therefore, an increase in terrorism should decrease investment and long run income and consumption.
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Terrorism is, in the broadest sense, the use of intentional violence for political or religious purposes. It is used in this regard primarily to refer to violence during peacetime or in the context of the war against non-combatants (mostly civilians and neutral military personnel).
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