Find an article that explains “Stagflation of the 1970’s in The United States”. Summarize the article including the cause of stagflation and how stagflation was stopped. Express and support your opinion if The United States is in now or entering a period of stagflation. What should the government do to, if anything improve the current economic situation?
Find an article that explains “Stagflation of the 1970’s in The United States”. Summarize the article including the cause of stagflation and how stagflation was stopped. Express and support your opinion if The United States is in now or entering a period of stagflation. What should the government do to, if anything improve the current economic situation?
In the article “Economic Stagflation in a Historical Context” by Mike Moffatt, stagflation is defined as the situation within an economy of both continuing inflation and stagnant economic activities together along with a rising unemployment rate. In the 1970s US, the inflation was increasing due to which individuals expected continued to rise in the good's prices, leading to demand increased wages. This will lead to an increase in the prices creating an upward spiral. The labor contracts rising came to include automatic living costs and the government started to peg some payments. These practices helped the retirees and workers to deal with inflation. The rising need for funds by the government increased the budget deficit and led to more borrowings of the government. This in return, increased the interest rates and increased costs for consumers and firms which further led to an increase in unemployment.
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