World War 2 spanned across six years, included many counties, but in the end, United States of America and the Allied Forces came out victorious in 1945. The war had a heavy impact on America’s economy, how American civilians and US soldiers returning to the states would continue to live out their American dreams. Gross Domestic Product (GDP) is a baseline to see how the general state of the Country’s economy is doing. When GDP is increasing it is called an economic expansion and when it is decreasing it is an economic recession. The war had a major impact on America’s GDP and what caused the GDP to fluctuate the way it did, post-war.
Post World War 2, in broad terms, the United States encountered an economic expansion. The government spending
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America had its little bump right after the war, but five years after the war was over, in 1950 America hit an economic boom, also known as The Golden Age of Capitalism. America encountered a long period of economic expansion. Many things had caused this expansion including a plethora of new firms in life insurance, which goes in hand with the surplus of personal savings. Pension funds increased by 33 billion dollars between 1950 and 1960. Things became more available and some products that had previously been deemed a luxurious product, or a “want”, have become an everyday product and classified as a “need”. Most of these products are durable goods such as a car, household appliances and other goods. Other products such as color television became part of the foundation of American homes and greatly contributed to large increase in GDP. As we look back at our equation of GDP where Y=C+I+G+NX, consumption played a huge role in huge increase of GDP during this time period. With the increasing job opportunities for Americans, their income increased, and with their increased incomes, there was an increase in total consumption. This had and impactful effect on America’s economic