The large amounts of government spending on the Vietnam War and the Great Society led to inflation for American citizens. Inflation is a situation where money loses some of its purchasing power. The United States government uses an economic measurement known as the Consumer Price Index to measure changes in prices for common consumer products.

Answer the following questions.

1. What year saw the greatest increase in the adjusted CPI?

2. What might account for the greater increases in adjusted CPI in the late 1960s compared to the mid-1960s?

3. Why might inflation be bad for American consumers?

Question

Babbles

History

24 August, 16:49

The large amounts of government spending on the Vietnam War and the Great Society led to inflation for American citizens. Inflation is a situation where money loses some of its purchasing power. The United States government uses an economic measurement known as the Consumer Price Index to measure changes in prices for common consumer products.

Answer the following questions.

1. What year saw the greatest increase in the adjusted CPI?

2. What might account for the greater increases in adjusted CPI in the late 1960s compared to the mid-1960s?

3. Why might inflation be bad for American consumers?

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Answers (2)

Know the Answer?

Gabriel Barr · Answer 1

1. 1970

2. Increased involvement in the Vietnam War, Great Society programs fully in effect.

3. Consumers lose purchasing power with inflation forcing them to buy less.

Mila Turner · Answer 2

1 - The largest increase in the adjusted CPI was recorded in 1973, with an inflation rate of 11.04%.

2 - The inflation increase at the end of the 1960s is explained by the fact that the Lyndon Johnson government was forced to increase taxes, increase the issuance of currency and cut public expenditures in order to meet the military expenses that the Vietnam War generated.

3 - Inflation might be bad for American consumers because the salary earned by each one of them would lose it's power over time.