Question

Which answer choice best explains the sudden rise in unemployment from 1918-1921?

Answer 1

Option A, The United States was in a period of demobilization after WWI.

Explanation:

The 1918-20 recessions were a severe deflationary contraction from 14 months after World War I. The depression was not only severe; the deflation was large compared to the subsequent downturn in the actual product, in the United States and in other nations.

After Armistice Day, short depression in the United States was accompanied by a rise in production. Nevertheless, the 1920 depression was also caused by the post-war changes, especially the demobilization of troops.

The reintegration of soldiers into the civilian labor force was one of the main changes. There were 2.9 million people working in the Military in 1918. This declined in 1919 to 1.5 million and in 1920 to 380,000.

It was 1920 when civilian labour rose by 1.6 million or 4.1 percent in one year, and the effects on the labor markets were most startling. (This is the highest one-year rise in labor force, although it is lower than the figures during the sub-World War II demobilization in 1946 and 1947)