Chapter 1: Problem 4

Which statement is true? \((\mathrm{LO} 4,5)\) a) There was a great deal of stagflation in the \(1970 \mathrm{~s}\). b) We had full employment for most of the \(1980 \mathrm{~s}\). c) We have had seven recessions since World War II. d) None of the above.

Short Answer

Expert verified

Statement (a) is true: "There was a great deal of stagflation in the 1970s."

Step by step solution

Analyze Statement (a)

Statement (a) suggests that there was a great deal of stagflation in the 1970s. Stagflation is a term used to describe a period of stagnant economic growth, high unemployment, and high inflation. The 1970s was a period known for its high inflation and high unemployment. This statement is true.

Analyze Statement (b)

Statement (b) implies that there was full employment for most of the 1980s. Full employment is a term used to describe a situation where there are enough jobs for everyone who wants to work and is actively looking. The 1980s were characterized by periodic high unemployment and reduced government spending on social programs, making this statement false.

Analyze Statement (c)

Statement (c) states that there have been seven recessions since World War II. A recession is a period of reduced economic activity, typically identified by two consecutive quarters of negative GDP growth. Since World War II, there have been more than seven recessions. Therefore, this statement is false.

Analyze Statement (d)

Statement (d) claims that none of the above statements is true. Based on our analysis, Statement (a) is true, which makes this statement false.

Conclusion

After analyzing each statement individually, we can conclude that Statement (a) is the true statement: "There was a great deal of stagflation in the 1970s."