Question

What year saw the greatest increase in the adjusted CPI?
What might account for the greater increases in adjusted CPI in the late 1960s compared to the mid-1960s?
Why might inflation be bad for American consumers?

Answer 1

Explanation: The year of greatest increase in adjusted CPI

• The year 1970 saw the greatest increase in the adjusted CPI as a huge amount of money was spent by the government on the Vietnam War.
• The Great Society programs too triggered inflation for the citizens of America.
• Inflation is the term used when money loses its purchasing power.
• The government of United States used an economic indicator called the CPI ( Consumer Price Index) to find out the changes in prices for consumer products.
• Consumers lost their purchasing power because of inflation as a result they were forced to buy less.
• During the early 1960s prices were under control. They started rising at a slow pace.
• The CPI index rose 6.54% between 1960 and 1965.
• The Council of Economic Advisors which was headed by Walter Heller came up with a plan to strike a balance between a healthy growth and limited inflation.
• Until 1965, the economy was moving at a steady pacewith fall in unemployment and no inflation.
• But beginning of 1965 saw an uptick in the price level.
• The CPI index climbed to 23.07% from 1965 to 1970.
• The economy was facing the pressure.
• It quickly eroded the income of Americans who lived on fixed income which also included the elderly persons.
• People were forced to buy less because of the inflation which led to a dip in their savings.

Hope this helps.

Answer 2

1. 1970

2. Increased involvement in the Vietnam War, Great Society programs fully in effect.

3. Consumers lose purchasing power with inflation forcing them to buy less.

-There you go loves :)