Its easier to start from third blank.
The second last sentence
But after the authorities took steps to suppress high inflation, faith returned.
suggest that the inflation has been controlled and faith has returned.

However, in last sentence, its written that the "faith" is at risk (imperiled)

Now, it‘s again imperiled: we may face a (iii) _______ and contentious future.
So, the future will be something bad or crimped.


For second blank,
The longest (ii) ______ occurred in the 1970s,

And what happened during that "blank"
double-digit inflation spawned pessimism and frequent recessions

So, blank two denotes some period of failure or something negative.
moderation is a neutral term and abundance is positive.
So, lapse is most suitable for second blank.
(PS: I didnt know but lapse also mean a decline from previously high standards)

For first blank,

The prospect of downward mobility is not just (i) ______.
Here, the term "not just" implies that "downward mobility" could be described by the word in blank one.

downward mobility is auspicious (meaning something good) .... no its not because economic progress seemed doomed and people lost their faith.
downward mobility is dispiriting (well I don't know its meaning so hold)
downward mobility is inexorable (meaning impossible to stop) .... no because the authorities were able to take steps to suppress high inflation.

So, most suitable option is dispiriting.

(PS: dispiriting means causing someone to lose enthusiasm and hope; disheartening. So yeah downward mobility was dispiriting because people lost their faith).