Question

Which of the following factors played the biggest role in the slow growth of average incomes in the United States during the 1970s and 1980s?

A. Increased competition from India
B. Increased competition from Japan
C. Slow growth in productivity
D. Disinflation of the dollar

Answer 1

The biggest factor in the slow growth of average incomes in the US during the 1970s and 1980s was the significant slowdown in productivity growth.

Step-by-step explanation:

The slow growth of average incomes in the United States during the 1970s and 1980s can be attributed to several factors. However, the most significant aspect was the slow growth in productivity. During this period, there was an unexpected slowdown in productivity growth; the output per hour of U.S. workers in the business sector increased at an annual rate of 3.3% from 1960 to 1973 but dropped to only 0.8% from 1973 to 1982. This slump in productivity led to a deceleration of wage increases and a rising natural rate of unemployment, as the equilibrium wages did not adjust to the slower productivity gains immediately.

While there was increased competition from economies such as Japan, and stagflation, characterized by high inflation and unemployment, the fundamental issue that underpinned these economic symptoms was the lagging rate of productivity growth. Over time, wage increases needed to realign with productivity advances, and this realignment process contributed to the prolonged period during which average incomes grew more slowly.

Answer 2

C. Slow growth in productivity

Step-by-step explanation:

Within the period of 1970s and 1980s , the countries in western hemisphere experienced an energy crises, which caused by the reduction of oil supply from the middle east nations.

Because of this, many industries that directly use this resources (such as automobiles and pipelines for example) experience many problems in maintaining high level of productivity.

Since these sectors employ large number of American citizens, this lead to the the slow growth of average incomes in the United States during the 1970s and 1980s