The U.S. economic bubble burst after the attacks of September 11, 2001. Which of the following could be considered a contributing factor to the U.S. economic downturn?
A) a negative reassessment of long-term economic growth prospects in the U.S.
B) a newly formed level of political risk
C) lower expected earnings
D) all of the above

Question

Quizplus · Accepted Answer

All of the options listed (a negative reassessment of long-term economic growth prospects, a newly formed level of political risk, and lower expected earnings) were contributing factors to the U.S. economic downturn after the 9/11 attacks. The attacks created uncertainty and fear, causing investors and businesses to become more cautious and lower their expectations for future economic growth. Additionally, the increased political risk and ongoing war on terrorism further contributed to the economic slowdown. Lower expected earnings reflect this overall sense of caution and pessimism in the markets.

The US Economic Bubble Burst After the Attacks of September 11