As production of good for the war increased less goods remained for the people. This meant that demand increased and supply decreased. The government took several measures in order to control prices and combat inflation.
FDR created the office of price administration in order to fight inflation. The office of price administration, or OPA, froze prices, wages, and rents. In addition to this the OPA increased income tax rates and extended the tax to a wider range of people. This had the result of decreasing demand because people had less money to spend. The government also reduced demand by encouraging people to use their money to buy war bonds.
The OPA also set up a system of rationing which established fixed allotments of goods deemed essential for the military. Most people accepted rationing but inevitabley a black market was formed.
In order to ensure the armed forces and war industry had sufficient resources and supplies the war war production board was created. The war production board rationed fuel as well as other war materials and organized collections of goods that could be recycled for use in war efforts.
Rabea and Lisa
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Nice article! I really like how you explained definitions, because I did not know what some concepts meant.
ReplyDeleteGreat summary; it was condensed and concise but contained all the neccesary details.
ReplyDeleteThis was interesting to read becuase it is nice as a change to read the economic aspect of war rather than the combat aspect usually written about.
ReplyDeleteNicely written! This was very informative but there were a few typing errors.
ReplyDeleteLots of good information in this post. It's interesting how a black market would be formed even for these goods. Usually we think of the black market for illegal goods, but in this case it shows just how strict the government was with the rationing. Overall, this was very easy to read and flowed well, but it ends a little abruptly.
ReplyDeleteAlso, be sure to spell out Franklin D. Roosevelt!
Short and to the point! Gets right to the bare facts, without any of that fluff. You explained any confusing terms and kept me interested.
ReplyDelete