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What Is Stagflation? Inflation Increased Because Name Class Date Lesson 1, continued Nixon's action was unconstitutional. CONFRONTING A STAGNANT They ordered that Nixon sPend the ECONOMY money on the programs. What is stagflation? Nixon also followed "law and order" One of the biggest Problems facing policies to stop riots and antiwar Nixon was a weak economY. Between protests. He used the Central lntelligence 1967 and 1973 inflation and Agency (CIA) and the Internal Revenue unemployment increased. This situation Service (IRS) to harass PeoPle. He is known as stagflation. created an "enemies list" and had the Inflation increased because the CIA and IRS target people on this list' government had spent more on social The list included liberals and other programs and the war in Vietnam. opponents of his policies. Also, international trade competition and many new workers caused 1. What conservative Programs did unemployment. Nixon support? To combat stagflation, Nixon wanted to raise taxes and cut the budget. Congress refused. Nixon tried to reduce the amount of money in circulation by urging that interest rates be raised. That NIXON'S SOUTHERN STRATEGY caused a recession. Nixon also froze Whatwas the southern strategY? workers' wages and businesses' prices Nixon wanted to make sure he would and fees for 90 days. That helPed get reelectedin 1972. To achieve this, he inflation but kept the recession going. used what he called a southern strategy to The economy also struggled because win the support of southerners who were of the nation's need for loreign oil. The unhappy with desegregation policies. United States received much of its oil To attract white voters, Nixon tried to from the Middle East. ManY of these slow school desegregation. He violated countries belonged to a cartel called the Brownv. Board of Education ruling. OPEC (Organization of the Petroleum But the Supreme Court ordered the Exporting Countries). During the 1960s administration to follow the ruling, OPEC gradually raised oil prices. Then, which he did. Nixon also opposed the in 1973 a war broke out, with Israel extension of the Voting Rights Act of against Egypt and Syria. The United 1965. But Congress extended the act. States sent military aid to Israel. OPEC Nixon believed that the SuPreme nations sided with Egypt and Syria. They Court under Chief Justice Earl Warren stopped selling oil to the United States. was too liberal. During his presidency, Motorists faced long lines at gas stations. fuur justices, including Warren, left the Some factories and schools closed. When Court. Nixon took this opportunity to OPEC started selling oil to the United appoint more conservative justices. States agann,the price had quadrupled. 2. How did Nixon hoPe to win 3. How did OPEC affect the U.S. southern suPPort? economy? MifTlin Harcourt Publishing Company.
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