Final answer:
Jimmy Carter inherited the economic challenges and the large federal budget deficit from both Presidents Nixon and Ford. The economic issues included stagnating wages, inflation, and rising unemployment, all of which were present before Carter's administration. The correct option is D.
Step-by-step explanation:
When Jimmy Carter became president, he inherited an economy with stagnating wages, rising unemployment, inflation, and falling industrial productivity. These challenging economic conditions, including a large federal budget deficit, were the legacy of his predecessors. Specifically, he inherited the budget deficit from both Nixon and Ford.
Under Nixon, efforts to control inflation with reduced federal spending were initially pursued, but the strategy shifted to stimulate the economy through increased spending, resulting in an $11 billion deficit in 1971 which rose to a $25 billion deficit by the next year. Nixon's wage and price freeze brought only a temporary fix to the inflation concerns.
During Gerald Ford's presidency, the economy continued to face difficulties such as inflation and a depressed economy, leading to chronic energy shortages. Despite opposition from Congress, Ford made attempts to tackle inflation through various measures. However, his approach led to an increase in the budget deficit, which was exacerbated by his resistance to certain appropriations bills. Both presidents before Carter played roles in creating the economic environment that Carter had to manage upon taking office.