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Chapter 1: Problem 12

The inflation rate declined during the presidency of (LO5) a) both Eisenhower and Reagan b) neither Eisenhower nor Reagan c) Reagan d) Eisenhower

Short Answer

Expert verified
The inflation rate declined during the presidency of both Eisenhower and Reagan.

Step by step solution

01

Understanding Inflation Rate

Inflation rate refers to the percentage increase in the general price level of goods and services in an economy over a specific period, usually one year. If an inflation rate is declining, it means that the rate of increase in the prices is getting slower.
02

Inflation rate during Eisenhower's presidency

President Dwight D. Eisenhower was in the office from 1953 to 1961. During his tenure, the inflation rate stayed relatively stable and even experienced a decline. In the years 1954, 1958, and 1959, the inflation rate was negative, indicating a deflation or decline in the general price level of goods and services.
03

Inflation rate during Reagan's presidency

President Ronald Reagan was in the office from 1981 to 1989. In the early years of his presidency, the inflation rate was high. However, due to various economic policies during his tenure, such as lowering the federal funds rate and implementing tight monetary policy, Reagan managed to bring down the inflation rate from double digits (13.5% in 1980) to a much lower level (4.1% in 1988).
04

Choosing the correct answer

Based on the information from steps 2 and 3, we can conclude that the inflation rate declined during the presidency of both Eisenhower and Reagan. Therefore, the correct answer is: a) both Eisenhower and Reagan

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Most popular questions from this chapter

Which statement is true? \((\mathrm{LO} 2,6)\) a) Although our economy was not performing well, college graduates from the classes of 2009 and 2010 received more job offers than any other graduating class in history. b) The economic downturn that began in December 2007 is the longest since the \(1930 \mathrm{~s}\). c) Until the time of the Great Depression, the United States was primarily an agricultural nation. d) There were no recessions during the presidency of Bill Clinton (January 1993-January 2001).

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Which statement is true? (LO2) a) Twenty-five million Americans were officially unemployed in \(1933 .\) b) Our economy expanded steadily from 1933 to \(1945 .\) c) Once the Great Depression began in 1929, our economy moved almost steadily downhill until the beginning of 1940 . d) None of the above.
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