1970s Economic Crisis

What started the Oil Embargo?

Nixon requested aid to support Israel in Yom Kippur War. US was getting most of its oil from OPEC, many of which were Arab nations, some of which were at war with Israel, so OPEC restricted oil imports and cut oil reduction, increasing prices by 300%

What happened to the US as a result of the oil embargo?

Soon US was not getting its essential needs, producing and shipping goods became more costly because less oil was available, and therefore, companies produced fewer goods and services. The price of everything got higher

Did women enter the workforce

Yes - they had to so they could help support their families

How did the US government try to help with the problems posed by the oil embargo?

By issuing fuel rations and requiring companies to make more fuel efficient products

Why was there a decline in American Manufacturing?

Other countries were recovering from WWII and their economies were pretty good, so there was increased competition for American businesses

How did the US respond to increased competition in the US?

It used strategies to make products more cheaply and easily in the long run, but this meant that there were fewer factories and therefore fewer workers needed in the short run

How did the Decline in American Manufacturing affect the average citizen?

loss of jobs made rise in prices even harder for citizens

How did the government decrease foreign competition?

the government protected from foreign competition by restricting trade. Increased taxes on foreign goods and limited the number of foreign goods to encourage citizens to buy US made goods

What did the goverment do for unemployed workers?

It offered job training to help unemployed workers affected by the decline in manufacturing

What was the result of the combination of the Oil Embargo and the decline in American manufacturing?

Stagflation occurred because inflation went up while unemployment rates also went up

What did Nixon do that contributed to economic collapse?

He took the US off the gold standard