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Foreign Exchange Rate Essay Topics & Paper Examples

Foreign Exchange Rate Determination and Related Issues

According to economists the US economy had been in recession since March 2001 and the September 11th terrorist attacks only deepened this recession. Despite the fact that the attacks had a massive localized impact on New York City, the impact on the entire economy was not large enough to affect the productive capacity of the United States (Makinen, 2002). However, an immediate aggregate demand shock was felt – retail sales slumped and were much lower in the weeks following September 11th than they would normally have been; consumer confidence and business confidence indices were on the decline as well. But after three consecutive quarters of contraction in 2001, the economy showed signs of resurgence in the 4th quarter by showing…