Explain the causes of stagflation in the 1970s in the United States, and describe its effects on Americans.

History

1 answer:

katovenus [111]3 years ago

8 0

Answer:

Causes of stagflation in 1970:

1. The increase of oil prices and consequent increase of gasoline prices this phenomenon is known as cost push inflation.

2. Higher level of unemployment

Explanation:

Stagflation is the lethargic economic growth, depicted in factors such as high unemployment, happening while there are high rates of inflation in a given economy.

In 1970 the United States economy experienced stagflation because the oil prices reached historical high prices increases the cost of gasoline as well. As oil is the main raw material for producing gasoline the increase of oil prices caused a cost push inflation.

Usually economist believed that inflation was desirable as it was caused by the increase of demand, which mean that employment was being generated and therefore the need for consuming more goods and services was a logical explanation of the increase in demand. However, during the 70's this increase was the result of an externality (the increase of oil prices). At the same time the levels of unemployment rose in that decade creating the stagflation of the United States Economy.

You might be interested in

Which of these contributed to the panic of 1893?

AlekseyPX

Which of what is there supposed to be a A B C or D

6 0

4 years ago

The first American constitution was the

Levart [38]

Answer:

Articles of Confederation

America's first constitution, the Articles of Confederation, was ratified in 1781, a time when the nation was a loose confederation of states, each operating like independent countries.

3 0

3 years ago

What was the significance of the adoption of Orthodox Christianity by Kievan Russia?

RUDIKE [14]

Kievan Russia grew from the trade cities founded by Swedish Varangians. Kiev became the dominant city under Vladimir I, whose conversion to Orthodox Christianity and marriage to a Byzantine princess oriented Kiev toward Byzantium. Kiev thus became a bulwark against the spread of Latin Christianity.

5 0

3 years ago

Read 2 more answers

Terrorism can have global effects because it

gladu [14]

Answer:

It negatively affects trade and tourism. Violence makes people not want to come to a nation or area. Terrorism is a push-factor in many areas.

Explanation:

7 0

3 years ago

Congress passed the Civil Rights Act of 1964 using this Constitutional authority.

STatiana [176]

Congress passed the Civil Rights Act of 1964 using this Constitutional authority and this was a c) protection of state's citizens. The Civil Rights Act of 1964 is defined as a "landmark piece of civil rights legislation in the United States that outlawed discrimination based on race, color, religion, sex, or national origin."

5 0

4 years ago