Question

What was a key reason for the post-war cash crunch in America?

Answer 1

The main reason behind the post-war cash crunch in America was actually the combination of unemployment and inflation. Both the factors together led America to the period of cash crunch. It was almost a serial effect where one incident happened and the other just followed. People lost their jobs and unemployment increased. This resulted in lower buying power of the middle class. With inflation price of every commodity rose and this resulted in further cash crunch. This was together called “stagflation".