Question

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.

Answer 1

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.