Question

Why did inflation and other economic problems lead to demobilization

Answer 1

Inflation and other economic problems lead to demobilization because of the peace in the country, the army had to draw down and there was more production of consumer goods and less of war goods because of sudden excess demand of the consumer goods.

Explanation:

Demobilization is the process when the army of the country is to be drawn down because of the peace time in the country mostly followed by the war. Because of this time, there was a sudden demand of consumer goods and services, leading to excess demand of these goods.

So the production of these goods increased and that of war goods decreased. This further led to demobilization. It also led to the unemployment of the people working in the war industries.