Durin During The 1970s

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Part A: When we refer back to the 1970s, most people generally think of punk rock, lava lamps, and the hippie movement. However for the economy, it was a devastating economic decade of stagflation, a three day week and the return of unemployment. During this time period according to Dollar and Sense, “From the late 1940s to the early 1970s, the U.S. economy grew at an average annual rate of nearly 4%. The annual unemployment rate only exceeded 6% twice in the 25 years between 1949 and 1973. The annual inflation rate, too, only topped 6% twice, and was actually under 2% for 14 of the 25 years in this period. The real average hourly earnings of production workers increased at an average rate of over 2% per year” (Reuss). So, if the U.S. was doing so well during this time, how did this crisis of the 1970s come to be?…show more content…
went from being a reigning king to being challenged for its throne. Different curveballs were being thrown at the U.S.A such as international countries developing at a quick rate-mainly Japan, China, and India- energy prices spiking, and inflation/unemployment spiking to great highs. In 1973-1974, the first of two major “oil shocks” increased the price of petroleum by almost four times, dramatically raising energy costs for both consumers and businesses. Workers’ demand for wage increase outweighed the rate of productivity growth, driving up unit labor costs for businesses. The annual inflation rate spiked to over 10% in 1974 and again in each of the three years from 1979 to 1981. The annual unemployment rate topped 8% in 1975 and would reach nearly 10% in 1982 (Bresinger

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