Question

in 1971, under president richard nixon, the federal government passed legislation that \froze\ wages and the prices of consumer items. however, that did little to stop the increase in inflation or unemployment. what can you infer was behind nixon’s decision to \freeze\ wages and prices? workers would be willing to be paid less if it would help the economy. consumers would buy more if inflation continued to rise. inflation affects wages and prices, so freezing those would halt inflation. rising inflation would lead to improvements in unemployment.

Explanation:

To determine the inference, analyze each option:

• First option: There's no info suggesting workers' willingness to take pay cuts for the economy. Eliminate.
• Second option: Inflation rising usually makes consumers buy less (to avoid higher costs), not more. Eliminate.
• Third option: Inflation is the general rise of prices/wages. Freezing them would logically aim to stop inflation's growth, as the policy was an attempt to control inflation. This matches the reasoning behind the wage - price freeze.
• Fourth option: The passage says the policy didn't stop unemployment increase, and there's no indication inflation improves unemployment. Eliminate.

Answer:

C. Inflation affects wages and prices, so freezing those would halt inflation.