Pearson Edexcel · A-Level · History

    Course version: 9HI0 · Version from Sept 2015

    The impact of economic change on society: the effects of inflation on…

    Full specification wording

    Social and political change, 1973–80: The impact of economic change on society: the effects of inflation on family incomes; the growth of homelessness; the oil crisis and the end of cheap energy; the impact of foreign competition; the response of the government.

    Inflation eroded real family incomes, especially for those on fixed incomes, while unemployment and stagnant growth created stagflation.

    Checked against the Pearson Edexcel 9HI0 specification (opens in a new tab) on .

    • Point 2 of 4
    • 4 key terms

    Study notes

    From the checked teaching notes for this specification point.

    The idea

    Inflation eroded real family incomes, especially for those on fixed incomes, while unemployment and stagnant growth created stagflation. Homelessness grew as housing costs rose and cuts to social programmes took effect. The 1973 oil crisis, triggered by the OPEC embargo, quadrupled oil prices and ended the era of cheap energy, forcing changes in consumption and energy policy. Foreign competition, particularly from Japan and West Germany, hit American manufacturing, causing job losses in industries like steel and cars. The government responded with wage and price controls, energy conservation measures, and later deregulation, but these had mixed success and contributed to political disillusion.

    What earns the marks

    • Explains how inflation reduced purchasing power and affected family budgets.
    • Describes the growth of homelessness and its links to economic and policy factors.
    • Analyses the oil crisis as a turning point that ended cheap energy and prompted government action.
    • Assesses the impact of foreign competition on American jobs and industries.
    • Evaluates the effectiveness of government responses such as controls, conservation and deregulation.

    Common mistakes and how to put them right

    • Confusing inflation with recession.

      Put it right: Define inflation as rising prices and explain stagflation as the combination of inflation and high unemployment.

    • Assuming homelessness was only caused by personal failings.

      Put it right: Link it to structural factors like housing costs and cuts.

    • Treating the oil crisis as only an energy issue.

      Put it right: Show its wider economic and social consequences.

    Exam tips

    • Use data such as the 1973 oil price rise or inflation rates to illustrate arguments.
    • Connect economic changes to social effects like family stress and homelessness.
    • Assess government responses by weighing their aims against outcomes.

    Try the lesson

    The start of the Social and political change, 1973–80: The impact of economic change on society: the effects of inflation on family incomes; the growth of homelessness; the oil crisis and the end of cheap energy; the impact of foreign competition; the response of the government. lesson, made from checked teaching notes for this specification point.

    Have a go first

    How did inflation most significantly affect the real incomes of American families during the 1970s?

    Listen

    Inflation eroded real family incomes, especially for those on fixed incomes, while unemployment and stagnant growth created stagflation. Homelessness grew as housing costs rose and cuts to social programmes took effect. The 1973 oil crisis, triggered by the OPEC embargo, quadrupled oil prices and ended the era of cheap energy, forcing changes in consumption and energy policy. Foreign competition, particularly from Japan and West Germany, hit American manufacturing, causing job losses in industries like steel and cars. The government responded with wage and price controls, energy conservation measures, and later deregulation, but these had mixed success and contributed to political disillusion. A strong answer earns marks for these points. Explains how inflation reduced purchasing power and affected family budgets. Describes the growth of homelessness and its links to economic and policy factors. Analyses the oil crisis as a turning point that ended cheap energy and prompted government action. Assesses the impact of foreign competition on American jobs and industries. A common slip: Confusing inflation with recession. Instead, define inflation as rising prices and explain stagflation as the combination of inflation and high unemployment. Exam tip: Use data such as the 1973 oil price rise or inflation rates to illustrate arguments.

    See it

    A top-down flowchart. Inflation leads to two effects: eroded real family incomes, and stagflation, defined as inflation with high unemployment. Separately, rising housing costs and cuts to social programmes both lead to the growth of homelessness. The 1973 oil crisis, triggered by the OPEC embargo, leads to oil prices quadrupling, which leads to the end of cheap energy, which leads to changes in consumption and energy policy. Foreign competition from Japan and West Germany leads to job losses in steel and cars. Finally, the government response of wage and price controls, conservation and later deregulation leads to mixed success and political disillusion.
    Shows how inflation, housing costs and social programme cuts, the oil crisis, foreign competition and government responses connected to social and economic effects.

    Key words

    Say what each word means before you turn the card.

    Economic instability and stagflation

    Try answering aloud or in your head before turning the card.

    Social consequences of economic change

    Try answering aloud or in your head before turning the card.

    Energy policy and dependence

    Try answering aloud or in your head before turning the card.

    Government intervention and its limits

    Try answering aloud or in your head before turning the card.

    See every definition
    Economic instability and stagflation
    Inflation eroded real family incomes, while unemployment and stagnant growth together created stagflation.
    Social consequences of economic change
    Homelessness grew as housing costs rose and cuts to social programmes took effect.
    Energy policy and dependence
    The oil crisis ended the era of cheap energy and forced changes in consumption and energy policy.
    Government intervention and its limits
    Wage and price controls, energy conservation measures and later deregulation had mixed success and contributed to political disillusion.

    Label the diagram

    Some boxes have lost their names. Pick the right name for each number.

    The diagram again, with 3 boxes numbered instead of named. A top-down flowchart. Inflation leads to two effects: eroded real family incomes, and stagflation, defined as inflation with high unemployment. Separately, rising housing costs and cuts to social programmes both lead to the growth of homelessness. The 1973 oil crisis, triggered by the OPEC embargo, leads to oil prices quadrupling, which leads to the end of cheap energy, which leads to changes in consumption and energy policy. Foreign competition from Japan and West Germany leads to job losses in steel and cars. Finally, the government response of wage and price controls, conservation and later deregulation leads to mixed success and political disillusion.

    • 1Box 1

    • 2Box 2

    • 3Box 3

    0 of 3 labelled

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