The term of stagflation refers to a state in which the economy has a high inflation rate partnered with high unemployment rates. People in America were buying left and right which increased the demand of prices which led to the need for a bigger wage, also increasing prices. The inflation that occurred throughout the 1970s was in part because of the oil prices, misleading predictions, and simply by greed. A large factor was also the monetary policy that was used at the time since it took care of large deficits. In addition the government's deficit was on the rise which made them have to borrow from other countries. This increased interest rates as well as costs even high. In response to this many businesses had to let employees go since they couldn’t keep up with the economy. To fight this President Carter increased the government’s spending as well as other small methods but ultimately his solutions were unsuccessful. Then, as the 70s drew to a close the largest factor in the fight against inflation was the Federal Reserve Board as it focused on the money supply. The Feds denied money to an economy with increased inflation rates, which only fed the fire. and because of this the loans that businesses made began to reduce leading the United States into a recession.