WORLD WAR I
CAUSES AND COURSE OF THE WAR
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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remained low before 1941
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was much less serious a problem than it had been during World War I
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was largely controlled by the federal government
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was less a concern than fears of deflation
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Detailed explanation-1: -Three months later, President Roosevelt introduced a seven-point plan to control inflation. The plan, involving several federal agencies in addition to the OPA, called for heavier taxes, price control, stable wages, stable farm prices, war bond buying, rationing and less consumer credit.
Detailed explanation-2: -The Federal Reserve seeks to control inflation by influencing interest rates. When inflation is too high, the Federal Reserve typically raises interest rates to slow the economy and bring inflation down.
Detailed explanation-3: -According to the Bureau of Labor Statistics (BLS), the rapid post-war inflationary episode was caused by the elimination of price controls, supply shortages, and pent-up demand.
Detailed explanation-4: -Inflation in 1945 was 2.3%. One year later, in December 1946, it soared to 18%. It peaked in March 1947 at 20%. By December 1947, it decreased to 9%.