impact of economic change
- Created by: catrionabucknell_
- Created on: 15-05-16 12:46
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- IMPACT OF ECONOMIC CHANGE
- INFLATION
- 1977 Carter took office 5%, one year doubled to 10%
- 1978: poll showed 68% of people saw inflation as greatest concern
- made everything more expensive
- July 1974 alone prices rose by 3.7%
- cost of living rose on average 8.2% per year 1973-1983
- Mcdonalds burger cost 15 cents in 1967 rose to 50 cents in 1981
- 1977 Carter took office 5%, one year doubled to 10%
- SLUGGISH GROWTH + STAG-FLATION
- Industrial production rose 1% 1972-1978 compared to 3.2% 1948-1955
- economic rivals - Japan and Germany
- productivity levels 4-5%
- economic rivals - Japan and Germany
- inflation stood at 11% but un-employment rose to 9%
- family incomes and living standards fell
- US standard of living fell to 5th in world
- stagflation = increased poverty levels
- no. under poverty line rose from 11.2% in 1974 and 12.5% to 1976
- eligibility for food stamps rose from 18.5 million 1976 to 20 million in 1980
- family incomes and living standards fell
- Industrial production rose 1% 1972-1978 compared to 3.2% 1948-1955
- HOMELESS-NESS
- Inflation and rising un-employment caused household debt to rise rapidly
- foreclosures by banks and increased homelessness
- Philadelphia hit bad
- 1951 manufacturing provided 46% of jobs
- hit hard by unemployment cuasing to drop t 24% in 1977
- no. welfare jumped from 20,000 1970 to 340,000 1980
- more than 20% of the population
- 1951 manufacturing provided 46% of jobs
- stagflation = increased poverty levels
- no. under poverty line rose from 11.2% in 1974 and 12.5% to 1976
- eligibility for food stamps rose from 18.5 million 1976 to 20 million in 1980
- Inflation and rising un-employment caused household debt to rise rapidly
- OIL CRISIS
- contributed to stagflation
- Yom Kippur War of 173 led to OPEC oil embargo on US
- 387% increase in price of oil
- rose from $3 a barrel 1973 to $34 in summer 1979
- Yom Kippur War of 173 led to OPEC oil embargo on US
- 13th June 1979 - 58% of USA petrol stations closed
- america hit hardest as greatest consumer of oil
- 1970 imported $4 billion by 1980 this reached $80 billion
- huge effect on economy
- GNP dropped 2.5% in first 3/4 of 1973
- fell another 3.2% winter of 1974-1975
- 90% of US citizens believed inflation was permanent part of US economy
- GNP dropped 2.5% in first 3/4 of 1973
- contributed to stagflation
- FOREIGN COMP-ETITION
- US car industry hit hard
- inexpensive and well made Japanese cars appealed to public
- 1981: Japanese companies had 23% of US auto mobile market
- West Germany and Japanese cars has better fuel consumption
- 1974, Chrysler, Ford and General Motors laid of 224,000 workers
- 1980: Chrysler faced bankrupcy
- only survived through federal bailout of $1.3 bn.
- car imports rose by 1/3
- 1980: Chrysler faced bankrupcy
- inexpensive and well made Japanese cars appealed to public
- European Economic Community set up in 1957 with 9 countries
- trading block which rivalled US foreign trade
- electronics facing European competition
- philips and Siemen
- electronics facing European competition
- trading block which rivalled US foreign trade
- due to foreign comp
- industrial plants closed or relocated to other areas of US with cheaper labour costs
- 1967 2/3 manufacturing in northeast and midwest by 1982 dropped to 50%
- rust belt to sun belt (south and west)
- distribution of wealth moved to places for agriculture
- industrial plants closed or relocated to other areas of US with cheaper labour costs
- US car industry hit hard
- INFLATION
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