US History Chapter 30: 1975-1991
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Questions and Answers

What economic phenomenon characterized the United States during the late 1970s and early 1980s?

  • Deflation
  • Stagflation (correct)
  • Hyperinflation
  • Deindustrialization

Which American president faced significant challenges during the Iran Crisis?

  • Ronald Reagan
  • Jimmy Carter (correct)
  • Gerald Ford
  • Richard Nixon

Which term best describes the feeling of discontent among Americans during Carter's presidency?

  • National Pride
  • National Resurgence
  • National Unity
  • National Malaise (correct)

What was a major consequence of corporate restructuring during the late 20th century?

<p>Decrease in long-term employment (D)</p> Signup and view all the answers

What key event took place in Eastern Europe in the late 1980s?

<p>The fall of the Berlin Wall (D)</p> Signup and view all the answers

Which president is associated with the 'Reagan Revolution'?

<p>Ronald Reagan (D)</p> Signup and view all the answers

What was a common public concern during the Ford administration?

<p>Energy crisis (B)</p> Signup and view all the answers

Which conflict is associated with George H.W. Bush's presidency?

<p>War in the Persian Gulf (A)</p> Signup and view all the answers

What was a major consequence of the shah purchasing large amounts of American arms?

<p>Iran emerged as the most powerful military force in the region. (A)</p> Signup and view all the answers

Which group was primarily responsible for suppressing opposition to the shah?

<p>The Savak, the shah's secret police (B)</p> Signup and view all the answers

Why did many Iranians despise the U.S. during the shah's regime?

<p>They saw the U.S. as supporting the shah's oppressive regime. (B)</p> Signup and view all the answers

What event occurred in January 1979 related to the shah?

<p>The shah was overthrown and Khomeini came to power. (B)</p> Signup and view all the answers

What was the top personal income tax rate reduced to by the Income Tax Act of 1986?

<p>28 percent (A)</p> Signup and view all the answers

What action did Khomeini take against the U.S. after becoming the leader?

<p>He denounced the U.S. involvement in Iranian affairs. (A)</p> Signup and view all the answers

Which Supreme Court judge was appointed by President Reagan?

<p>Sandra Day O'Connor (A)</p> Signup and view all the answers

What triggered the increase in violence and unrest in Iran in 1977?

<p>Protests against the shah were met with military force. (A)</p> Signup and view all the answers

What was the outcome of militant actions after the shah was allowed into the U.S. for medical treatment?

<p>They seized the U.S. embassy in Iran. (B)</p> Signup and view all the answers

What controversial defense initiative proposed by Reagan was commonly known as 'Star Wars'?

<p>Space-based missile defense system (D)</p> Signup and view all the answers

How many civilians were reportedly killed in the unrest during 1977?

<p>Over 10,000 civilians (C)</p> Signup and view all the answers

Who was primarily responsible for the surge in corporate mergers during the Reagan years?

<p>Michael Milken (B)</p> Signup and view all the answers

What kind of bonds did Michael Milken sell that had a high risk due to existing high debts?

<p>Junk bonds (A)</p> Signup and view all the answers

Which of the following was NOT mentioned as a type of institution that bought junk bonds during the Reagan era?

<p>Mutual Funds (C)</p> Signup and view all the answers

What was one of the key impacts of the Reagan administration's judicial appointments?

<p>Appointed a majority of federal judges (B)</p> Signup and view all the answers

What was the tax rate on corporate profits reduced to by the Income Tax Act of 1986?

<p>34 percent (D)</p> Signup and view all the answers

What percentage of Fortune 500 companies were taken over, merged, or forced to go private during the 1980s?

<p>20% (D)</p> Signup and view all the answers

What was the total value of mergers and acquisitions successfully undertaken in the 1980s?

<p>$500 billion (C)</p> Signup and view all the answers

How did many companies make themselves less attractive to raiders during the 1980s?

<p>By taking on huge debt or acquiring unprofitable companies (A)</p> Signup and view all the answers

What general economic issue did many American corporations face by the late 1980s?

<p>Wallowing in red ink (A)</p> Signup and view all the answers

What percentage of the nation’s corporate pretax earnings were consumed by debt payments?

<p>50% (D)</p> Signup and view all the answers

Which company cut a significant number of jobs instead of revamping its mills, as mentioned in the text?

<p>U.S. Steel (C)</p> Signup and view all the answers

How many jobs did IBM cut from its workforce between 1986 and 1995?

<p>80,000 jobs (B)</p> Signup and view all the answers

Which strategy was NOT mentioned in coping with debt by most corporations?

<p>Acquiring profitable companies (B)</p> Signup and view all the answers

What was Saddam Hussein's response to the Kurds assisting an Iranian advance in March 1988?

<p>He used chemical weapons against them. (A)</p> Signup and view all the answers

In August 1990, why did Iraq invade Kuwait?

<p>To control more oil reserves. (B)</p> Signup and view all the answers

What action did the UN take in response to Iraq's invasion of Kuwait?

<p>Imposing trade sanctions. (A)</p> Signup and view all the answers

What percentage of the world's total oil reserves did Iraq hope to control by annexing Kuwait?

<p>25 percent (D)</p> Signup and view all the answers

Which countries joined the U.S. in moving troops to Saudi Arabia following Iraq's invasion of Kuwait?

<p>France, Italy, Egypt, and Syria (D)</p> Signup and view all the answers

What did Iraqi soldiers do during their invasion of Kuwait?

<p>Carried off valuables and resources. (B)</p> Signup and view all the answers

What was the international response of Saudi Arabia and Kuwait to the invasion by Iraq?

<p>They turned to the U.S. and the UN for help. (C)</p> Signup and view all the answers

What were the Kurds seeking in northern Iraq?

<p>Independence. (D)</p> Signup and view all the answers

What year did leftist rebels overthrow the dictatorship of Anastasio Somoza in Nicaragua?

<p>1979 (D)</p> Signup and view all the answers

Why was Reagan determined to force the Sandinista rebels from power?

<p>They were backed by communist Cuba and the Soviet Union. (D)</p> Signup and view all the answers

What were the anti-Sandinista elements in Nicaragua known as?

<p>Contras (D)</p> Signup and view all the answers

What action did Congress take regarding military aid to the Contras in 1984?

<p>Banned further military aid. (B)</p> Signup and view all the answers

Who devised a scheme to funnel federal money to the Contras?

<p>Oliver North (D)</p> Signup and view all the answers

What illegal method did Oliver North use to fund the Contras?

<p>Selling weapons to Iran and using the profits (B)</p> Signup and view all the answers

What did Reagan seek from other countries and American private groups in relation to the Contras after Congress banned aid?

<p>Financial support (C)</p> Signup and view all the answers

How did the Contras fare in their efforts against the Sandinista regime?

<p>Made little progress against the regime. (C)</p> Signup and view all the answers

Flashcards

Oil Crisis of 1970s

A period of significant disruptions in the global oil supply, leading to energy shortages and economic challenges.

Ford Presidency

Gerald Ford's term as President of the United States (1974-1977).

Fall of South Vietnam

The communist takeover of South Vietnam in 1975.

Stagflation

A period of slow economic growth and high inflation.

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Carter Presidency

Jimmy Carter's time as President of the US (1977-1981).

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Reagan Revolution

Significant economic and political changes associated with President Reagan's policies.

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Persian Gulf War

A major military conflict in the Persian Gulf region.

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Collapse of Communism in Eastern Europe

The end of communist rule in Eastern European countries.

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Shah's unpopularity

The Iranian Shah was disliked by his people due to oppressive policies and support from the US.

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Savak

The Shah's secret police force, known for suppressing opposition.

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Iranian protests

Widespread demonstrations and riots against the Shah that escalated into significant violence.

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1979 Iranian Revolution

A revolution that saw the overthrow of the Shah, replacing him with an Islamic government led by Ayatollah Khomeini.

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Khomeini's stance on US

Ayatollah Khomeini condemned the US role in supporting the Shah.

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Hostage Crisis

Iranian militants seized the US embassy, demanding that the US return the shah to Iran

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Carter's Dilemma

US president Carter faced a difficult choice regarding the safety of the hostages.

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Shah's US visit

Allowing the Shah to seek medical treatment in the US, which angered Iranian revolutionaries.

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Income Tax Act of 1986

A law passed during Reagan's presidency that lowered income tax rates for individuals and corporations. It reduced the top individual income tax rate to 28% and corporate tax rate to 34%.

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Sandra Day O'Connor

The first female Justice appointed to the Supreme Court by President Reagan in 1981. Her appointment marked a significant milestone in the US judiciary.

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Strategic Defense Initiative (SDI)

A proposed space-based missile defense system, nicknamed 'Star Wars', aimed at protecting the US from nuclear attack. It faced criticism for its high cost and technical challenges.

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What were 'Junk Bonds'?

These were debt securities issued by companies with high debt and risks. They offered unusually high interest rates to attract investors.

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Michael Milken's role

He was a key figure in the corporate merger wave of the 1980s. He successfully marketed 'Junk Bonds' to big investors, facilitating many mergers.

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Consequences of 'Junk Bonds'

The high-risk bonds fueled a surge in corporate mergers and acquisitions. While this led to economic growth, it also contributed to financial instability in the late 1980s.

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Reagan's Judicial Legacy

By 1988, Reagan had appointed three Supreme Court justices and many federal judges, shifting the judiciary's ideology towards conservatism.

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The New Merger Movement

A period during Reagan's presidency characterized by a wave of corporate mergers and acquisitions, largely driven by the availability of 'Junk Bonds'.

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Merger Movement of the 1980s

A period of intense corporate consolidation in the United States where many companies were acquired, merged, or taken private, driven by financial maneuvering and profit-seeking.

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Raiders in the Merger Movement

Individuals or groups who actively sought to take over companies by making hostile bids or acquiring large amounts of stock, often for financial gain.

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Debt-Taking as a Merger Defense

A strategy employed by companies during the 1980s to make themselves less attractive targets for takeover by increasing their debt levels or acquiring unprofitable businesses.

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Red Ink in American Corporations

The situation where corporations faced significant financial losses and operated at a deficit, a common occurrence in the late 1980s.

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Debt Payments' Impact on Corporations

The significant amount of money corporations had to spend on debt payments, often consuming a large portion of their earnings, hindering growth and investment.

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Coping with Debt: Asset Sales

A strategy employed by corporations to reduce debt by selling off assets such as factories, offices, or warehouses.

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Coping with Debt: Layoffs

Corporations used layoffs to reduce costs and address debt burdens, resulting in significant job losses across industries.

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Impact of Merger Movement on Workers

The merger movement and response to corporate debt contributed to widespread job losses across various sectors, particularly in industries like steel and technology.

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Sandinista Rebels

Leftist rebels in Nicaragua who overthrew the Somoza dictatorship in 1979.

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Reagan's Anti-Sandinista Policy

President Reagan opposed the Sandinista rebels due to their communist ties and aimed to remove them from power.

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Contras

Anti-Sandinista forces in Nicaragua supported by the US government.

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Congressional Ban on Aid to Contras

In 1984, Congress prohibited further US military assistance to the Contras, but Reagan still sought ways to help them.

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Oliver North's Scheme

A plan by Marine Colonel Oliver North to secretly channel federal money to the Contras.

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Iran-Contra Affair

A scandal involving the clandestine sale of US weapons to Iran in exchange for the release of American hostages and using the profits to fund the Contras.

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Violation of Congressional Ban

Oliver North's actions, funneling money to the Contras, directly violated Congress's ban on such aid.

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Consequences of Iran-Contra Affair

This scandal resulted in a major political controversy for Reagan, exposing covert operations and raising questions about his administration's integrity.

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Saddam Hussein's Actions Against Kurds

Saddam Hussein, the Iraqi dictator, brutally suppressed the Kurdish population, an ethnic minority seeking independence in northern Iraq. He used chemical weapons against them, killing over 5,000 civilians in 1988.

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Iraq's Invasion of Kuwait

In August 1990, Iraq invaded Kuwait, aiming to seize its oil reserves and control about 25 percent of the world's oil supply.

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International Response to Iraq's Invasion

The invasion of Kuwait triggered a global response. Saudi Arabia and Kuwait sought help from the US and the UN. Trade sanctions were imposed on Iraq, and the US, with allies like Britain, France, and Egypt, deployed troops in Saudi Arabia.

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Reasons for US Involvement in Gulf War

The US intervened because of the strategic importance of the Persian Gulf region and its oil resources. They also aimed to deter further aggression by Iraq and protect Saudi Arabia.

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Kurds in Iraq

The Kurds are an ethnic minority group in northern Iraq who have long sought their own independent state. They faced oppression and violence from Iraq's government.

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Chemical Weapons Used By Saddam Hussein

Saddam Hussein's regime used chemical weapons, specifically against Kurdish civilians, in a violent act of suppression and intimidation. This event highlighted the brutality of Saddam's regime and the dangers of chemical warfare.

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Saddam Hussein's Goals

Saddam Hussein's goal in invading Kuwait was to expand Iraq's territorial control and oil reserves, giving it significant power in the region.

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Impact of Iraq's Invasion on the Region

Iraq's invasion of Kuwait destabilized the Middle East, creating a tense situation and prompting international intervention. This conflict highlighted the importance of regional stability and the value of oil resources.

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Study Notes

Chapter 30: Running on Empty: 1975-1991

  • The period from 1975 to 1991 was marked by economic struggles and significant foreign policy events.
  • The Oil Crisis of 1973 started with Egypt and Syria attacking Israel, escalating the oil embargo against the U.S. Oil prices skyrocketed from 3to3 to 3to12 a barrel.
  • President Ford's administration struggled with inflation. His program, WIN, to combat inflation failed to effectively curb rising prices and unemployment.
  • Ford faced criticism over economic downturn and the fall of South Vietnam. The South Vietnamese army collapsed in 1975.
  • Ford versus Carter election of 1976 : The incumbent president was a hard worker untouched by scandal, but struggled to address the nation's economic problems. Jimmy Carter, a naval officer, peanut farmer, and businessman, emphasized his lack of Washington connections and personal integrity, which resonated with voters. Carter's rise was assisted by the rise of television and democratization of delegate selection.
  • Carter's administration had a reputation for presenting ideas to Congress but lacking follow-up action in their implementation and execution. This earned a reputation for a lack of effectiveness.
  • The Iranian Crisis involved 400 armed Muslim militants seizing the U.S. Embassy in Tehran, Iran and holding U.S. citizens hostage, which caused an international crisis that lasted for months. During WWII, Great Britain, the Soviet Union and the United States had occupied Iran. The Iranian Shah and his secret police (SAVAK), were unpopular with citizens; the U.S. supported the Shah during this time. Opponents of the Shah and the U.S. rioted.
  • The Iran hostages crisis and the 1980 election
  • The rise of the Reagan Revolution and Ronald Reagan's policies
  • The New Merger Movement : The Reagan years showed a mad frenzy of mergers. Notable figures were Michael Milken and Ronald Perelman, who used junk bonds to gain control of companies and led to immense financial growth, which led to further economic expansion and deregulation.
  • The issues in "Job for Life": Layoffs hit home during the 1980's as corporations dealt with debt by selling assets and laying off workers. The number of employees who worked for Fortune 500 companies decreased by three million, and many jobs were moved to countries with cheaper labor.
  • The 1988 Election with George H.W. Bush winning over Michael Dukakis, and the effects of the 1980s corporate restructuring on the economy and the electorate
  • The collapse of communism in Eastern Europe and the Persian Gulf War were also major events during this period, with extensive involvement by the U.S.
  • The Reagan Revolution involved tax cuts, increased military spending and a shift in ideological focus toward a more fervent patriotism, religion, family values and opposition to Soviet Communism.
  • The Iran-Contra affair was a significant scandal involving high-level officials in the Reagan administration, accused of illegally funding the Contras and other activities.

Assessing the Reagan Revolution

  • Critics point to Reagan's administration as not being effective at administration and the various scandals (Iran-Contra and financial activities) associated with the presidency.
  • The period influenced American corporatization and changes in the Soviet Union. His tax cuts and booming stock market had an outsized impact on the wealthy, which disproportionately impacted others, leading to economic struggles.
  • Deregulation policies were key to the era, but had unforeseen consequences
  • Reagan's military policies and actions shaped political discourse.

Deficits

  • The period saw a significant increase in federal deficits due to military spending, the costs of the Persian Gulf War, and the collapse of S&Ls, largely driven by leveraged buyouts and risky investments, which required taxpayer-funded bailouts.
  • Tax cuts and government spending policies contributed to the rise in debt.

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Chapter 30 Running On Empty 1975-1991 PDF

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Explore the significant events from 1975 to 1991 in U.S. history, focusing on economic struggles and pivotal foreign policy decisions. This quiz covers the Oil Crisis, President Ford's administration challenges, and the 1976 election between Ford and Carter, all critical to understanding the era's impact on American society.

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