Final answer:
The expansion era slowed in the 1970s due to economic decline, oil embargoes, international competition, and stagflation caused by the concurrent rise in stagnation and inflation. Slowing productivity growth also contributed to a higher natural rate of unemployment as wage patterns failed to adjust quickly.
Step-by-step explanation:
The expansion era in the United States slowed down in the 1970s for several reasons. A combination of domestic issues and international influences played a role in this. The nation faced economic decline, as seen in the closure of factories and the reduction of wages for industrial workers. The oil embargoes in 1973, as a repercussion of U.S. support for Israel during the Arab-Israeli war, led to shortages and high oil prices, contributing to economic stress.
Increased competition from abroad, with countries like Japan and Western Europe, challenged U.S. manufacturing supremacy. This competition contributed to an atmosphere of economic transformation. The result was 'stagflation,' a term coined to describe the concurrent occurrence of stagnation and inflation, which presented a new, bewildering economic scenario where unemployment and inflation rose together, defying previous economic patterns.
The slowing down of productivity growth was another significant factor. The natural rate of unemployment rose because wage increases did not adjust quickly enough to the reduced productivity growth, leading to a surplus of labor supply over demand. This increased unemployment persisted until the wage patterns finally adjusted to the slower productivity gains.
Ultimately, these factors indicate that the slowdown of the expansion era in the 1970s was attributed to a complex interaction of economic, political, and social challenges.