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Chapter 10: Problem 37

Inflationary recessions first occurred in the _____. a) \(1950 \mathrm{~s}\) b) \(1960 \mathrm{~s}\) c) \(1970 \mathrm{~s}\) d) \(1980 \mathrm{~s}\)

Short Answer

Expert verified
Inflationary recessions first occurred in the \(1970 \mathrm{~s}\).

Step by step solution

01

Understanding inflationary recession

An inflationary recession is an economic situation in which the economy experiences both high inflation and a decline in economic activity (recession) simultaneously. It is a combination of two adverse economic events happening at the same time.
02

Identifying the correct decade

Inflationary recessions first occurred in the 1970s mainly due to the oil crisis which led to a spike in oil prices, pushing inflation up and causing slower economic growth. The increase in oil prices caused production costs to rise and demand to fall, leading to an economic recession.
03

Choose the correct option

Based on the information from Step 2, the correct option is: c) \(1970 \mathrm{~s}\)

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