4
AssignmentMultiple Choice

Inflation and Stagflation

Question 4 • (Galli)WCA 2221 Civics/Economics 1st nine weeks 26-27

What can you infer was behind Nixon's decision to "freeze” wages and prices?

Answer
A
Workers would be willing to be paid less if it would help the economy.
B
Consumers would buy more if inflation continued to rise.
C
Inflation affects wages and prices, so freezing those would halt inflation.
D
Rising inflation would lead to improvements in unemployment.

Explanation

Nixon’s wage-and-price freeze was intended to stop prices and wages from rising rapidly. The reasoning was that inflation shows up in increasing wages and prices, so temporarily holding them steady could slow or halt inflation. The other choices either assume people would accept lower pay or suggest effects on consumer spending or unemployment, which do not explain the freeze.

AI-written and checked against the verified answer.

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