Question

The group that raised oil prices in the early 1970s, leading to inflation and the higher interest rates of the international debt crisis, is known by its acronym

Answer 1

The Organization of Arab Petroleum Exporting Countries (OAPEC) raised oil prices in the early 1970s. This decision led to inflation, stagflation, and initiated an international debt crisis as countries struggled economically due to these adjustments in the oil market.

Step-by-step explanation:

The group that raised oil prices in the early 1970s is the Organization of Arab Petroleum Exporting Countries (OAPEC), leading to inflation and international debt crisis. The impact was widespread, creating economic disruptions known as stagflation, a period of high inflation and unemployment. This was especially pronounced in the United States, which experienced a series of recessions. These events highlighted the strong interdependence of international political and economic developments.

OAPEC's decision to raise oil prices and reduce production was triggered by geopolitical tensions, specifically the Yom Kippur War in 1973. The high oil prices led to inflation, a rise in the natural rate of unemployment, and a higher price level pushing the economy further away from potential GDP. The international debt crisis followed these events as countries struggled to pay their debts amidst the economic turmoil.

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