Question

Why was inflation a problem after World War II?

a. Many people went into debt buying on credit without the income to pay in cash.
b. Many men came home from the war without being able to get a job.
c. Government controls ended, and prices of goods rose without workers getting raises.
d. Prices of goods increased at double the rate of the standard of living.

Answer 1

c

After WWII the government lifted wartime price controls and rationing while consumer demand (and savings) was high. That caused prices to rise quickly but wages didn’t immediately keep up, producing postwar inflation.