OpenStudy (anonymous):

The U.S. government introduced rationing mostly in order to make sure war industries had the resources they needed keep prices and wages stable despite shortages of goods boost employment levels among women and minorities encourage citizens to support the war effort abroad

6 years ago
OpenStudy (anonymous):

A little bit of (1) and (2). The idea, yes, was to make sure that war industries had the resources they needed, but inasmuch as those industries were private, and had to buy their supplies on the open market, the idea was to restrict private purchase so that the price on the open market did not soar in response to the massive increase in demand caused by the war industries' need. That is, if the government placed an order with GM for 10,000 tanks, this would ordinarily cause the price of steel to rise steeply, because GM would now want lots more steel, and would have to compete for it with private purchases, and purchases meant for civilian goods (like cars and washing machines). Either the government would have to control the price directly, which can lead to dangerous instability and shortages, not to mention a black market, or the government would have to suppress private demand -- ration goods -- or else the government would have to pay way more for its tanks than the peacetime price.

6 years ago
OpenStudy (anonymous):

By the way, you'll note that sometimes the government uses its price stimulating power the other way around, to deliberately support prices. For example, by placing an order for an extra 1,000 tanks in peacetime, the government can boost the price of steel if, for example, the steelworkers' union successfully lobbies the government to keep their wages up in the face of foreign competition.

6 years ago
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