The attacks on the United States will have far-reaching economic effects, further slowing a world economy already growing at its lowest rate in a decade and hastening the contraction of many economies around the world. "Retail sales fell 2.4% overall... Excluding the auto sector, sales were off a smaller 1...
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Excluding the auto sector, sales were off a smaller 1.6%. Commerce said the drops were the largest since the government began compiling retail data in its current form in February 1992". (USA Today1)
Millions of people have been effected financially from these acts. The main channel through which the attacks and continued threat of terrorism can affect the world economy is by raising the transaction costs of international economic exchange resulting in a drop in the potential output...