ECONOMICS
FEDERAL RESERVE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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increase in consumer and producer prices
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high oil prices
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doubling of the federal debt
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increased unemployment
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Detailed explanation-1: -Soaring energy prices fueled a wage-cost price spiral and widespread price hikes across the full spectrum of economic activity. Frequent recessions raised unemployment without cooling inflation. The Federal Reserve focused on propping up growth and was powerless to tame soaring prices.
Detailed explanation-2: -The period in the 1970s and extending into the early 1980s referred to as the Great Inflation was a time of rising inflation.
Detailed explanation-3: -The stagflation of the 1970s coincided with the first global wave of debt accumulation in the past half-century. Low global real interest rates and the rapid development of syndicated loan markets encouraged a surge in EMDE debt, especially in Latin America and many low-income countries.
Detailed explanation-4: -You may be hearing a lot about stagflation in the 1970s U.S., when energy prices skyrocketed due to an embargo led by OPEC, resulting in crude prices doubling from 1973 to 1975. This led to high inflation and recession for countries that imported large amounts of oil, Dolar said.