Which of the following best describes the overall economic impact of the food and energy supply shocks in the 1970s?
A) Many Americans began spending more in an effort to acquire needed goods before the shortages grew worse.
B) The economy experienced both rising price levels and increased unemployment.
C) The prices of food and oil products increased, but there was little impact on other sectors of the economy.
D) Because the U.S. economy is self-sufficient, these international supply shocks had little impact.
E) Many consumers responded by boycotting oil-related and food products, driving down the prices of these goods.

Question

Quizplus · Accepted Answer

The food and energy supply shocks in the 1970s resulted in both rising price levels and increased unemployment. This was due to the fact that the price of oil, a key input in many sectors of the economy, had risen sharply, leading to decreased consumer demand and decreased economic activity. Additionally, the high cost of food led to reduced consumer spending in other areas, further dampening economic activity.

Which of the Following Best Describes the Overall Economic Impact