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Unformatted text preview: with a hard hit agriculture economy and an oil embargo; it was the supply field that needed the help. This was new to the US. They had never had such a Food and Oil chock in their history especially one of this magnitude. President Ford was against inflation as he was still using the old formulas and imposed a tax surcharge, this caused GNP to drop! So in 1975 the US imposed a 23 billion dollar tax cut and the Fed increased the money growth supply. This again did not work as they were only looking 1 at demand and not supply. So the United States finally turned and found the problem of supply and the president passed a bill to increase the supply by making more jobs in infrastructure. This helped a lot as now there was more of a supply of jobs and the problem slowly melted away as more and more Americans now had money and there was a supply for them to spend that money....
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- Spring '09