Chapter 20, Problem 13AA

To determine

To state: The effect of terrorist attacks of September 11, 2001 on the American economy.

Explanation of Solution

The attacks of 9/11 had both immediate and long-term economic consequences, some of which continue to this day. The attacks shut down the stock market for a week and caused the Dow to drop nearly 700 points, further worsening the recession in 2001.

It has contributed to the War on Terror, one of the largest government spending efforts in the history of the United States. These wars needed approximately $ 1 trillion in raises each to the Defense and Homeland Security departments.

So, overall this has led to a huge setback for the American economy and the economy could not recover from this attack very soon.

Economics Concept Introduction

Introduction: Economic growth comes only from increasing the quality and quantity of production factors, which are composed of four large types: land, labour, capital, and entrepreneurship. Demand factors are the tools used in the development or production of a good or service in an economy.