In: Economics
List some of the major financial events of the 1990s to illustrate the impact of exchange rate fluctuations on the economy.
please do some specific answers and show more details. Thanks a lot.
The major economic events in 1990s are bush attacks in war
against Iraq, terrorists bombing in new York world trade centers,
agreement of trade between Canada, Mexico and US economic plan by
Clinton cuts the defense spending. The North American Free Trade
Agreement (NAFTA) eliminate the tariffs with liberalizing trading
agriculture, textiles and automobile manufacturing. This creates
economic relation between the developed countries. This agreement
give new job opportunities which leads to growing work force and
also discourage illegal migration. This make a higher level of
integration of Mexico with developed economies like United states
and Canada. The lowering of tariff rate attracts other countries
and also make the impressive export. The regional trade increase
the GDP of Mexico and also there is a high flow of US FDI to
Mexico.
The economic plan by president Clinton make strong economic growth
and record job creation in US economy. Clinton submitted a
corresponding and budget tax reform by refusing spending and
raising taxes on wealthiest. This tax reform made a relief to low
income families. This raised the leaving standard of the
marginalized community in US. This leads the increasing tax revenue
from 17% of GDP to 20% of GDP. This tax reform increase the value
of dollar and also increase the exchange rate. The over valued
dollar attract other competitive economies to start trade with US
economy.