There are a a lot of events that led to the beginning of World War II. But, a lot of the events leading to World War II were a direct result due to World War I. One event leading to World War II started with Hitler rising to power in the 1930s, as he was trying to rebuild Germany. As Germany, was crippled due to World War I and the Treaty of Versailles. Germany was crippled due to World War I and the Treaty of Versailles because Germany lost the war, had to take responsibility, and pay a large amount of money. This caused Germany to be in a turmoil. Another cause of the World War II was that after World War I, the European nations wanted to maintain peace , but Hitler did not. Hitler became aggressive and started to take land from neighboring…show more content… Show Following each question are suggested points or terms to include in a response. Think about the connection and how you would include the item.
The outbreak of war in Europe substantially changed the way in which the Federal Reserve System was expected to operate as the nation’s central bank in a period during which US participation in the conflict was imminent. The most important challenge for the System was to deal with the possibility of very large fiscal deficits due to increased war expenditures. Even before the period of active US participation in the conflict, the expansion of the defense program and the decision to help finance allies’ purchases of war material from the United States (under the so-called lend-lease program) significantly increased US government financing needs. After the decision to actively participate in the conflict, the US government substantially increased its expenditures, confirming previous expectations. Despite the fact that the Treasury relied more heavily on taxation than in World War I and despite increased tax revenue from the substantial expansion of industrial production, the active participation in the war resulted in a sharp increase in the federal deficit. Perhaps the most important actions performed by the System during the war were to control government bond prices to promote stable financial markets and (even more critical) to help reduce the interest rates on financing the extraordinarily large fiscal deficits associated with active participation in the war. In 1939, shortly before the beginning of the conflict in Europe, the System made some open-market purchases to influence the yields on short-term government bonds. The goal was to promote stability in short-term funding markets and prevent market disorder in the face of uncertainty at the outset of the war. Once the United States formally entered the conflict, the system made a firm commitment to support government bond prices. In April 1942, the Federal Open Market Committee announced that it would maintain the annual rate on Treasury bills at three-eighths of 1 percent by buying or selling any amount of Treasury bills offered or demanded at that rate. For longer-maturity government securities, the System also established a maximum yield (or a minimum price) by standing ready to buy whatever amount of these securities was necessary to prevent their yields from rising above the maximum yield. Such a commitment to maintain low yields (high prices) of government bills and bonds necessarily resulted in the purchase of a significant volume of government securities, producing a substantial expansion of the System’s balance sheet and, in particular, of the monetary base. Indeed, the monetary base increased by 149 percent from August 1939 to August 1948. An additional factor contributing to the increase in the monetary base, and as an immediate consequence of the outbreak of war in Europe, was the acceleration of gold inflows as Britain and other allies paid for war materials and other supplies produced domestically by shipping gold to the United States. These two factors resulted in a vigorous expansion of the monetary base and the money supply. As a result, inflation rose significantly during the period. This happened despite price and wage controls and consumer credit controls (and despite an increased willingness of the nonbank public to hold a significant fraction of their wealth in the form of monetary assets as reflected by the marked decline in the velocity of money observed during the war).1 Most economists at the time believed that as soon as the war ended the economy would likely fall into recession and the unemployment rate would rise substantially, partly because of the experience of previous wars (and the previous decade of the Great Depression) and partly because of the widespread Keynesian view that fiscal stimulus was the most effective means of boosting domestic economic activity, and such stimulus was about to decline with the end of the war. This belief, combined with the decision to continue to hold down Treasury financing costs, certainly contributed to the continuation of the government bond support program for much longer than what would be consistent with price stability. The inability of Federal Reserve officials to persuade the Treasury to let the System abandon the government bond support program (in view of other policy considerations such as price stability) clearly demonstrated that the Federal Reserve System was effectively under Treasury control. As economist Allan Meltzer notes in his book, Chairman Marriner Eccles described his work in wartime as “a routine administrative job…[T]he Federal Reserve merely executed Treasury decisions” (Meltzer 2003, 579). Given its inability to control growth of the monetary base through open-market operations or the discount window, under the constraints of the program to support government bond prices, the System used other tools to try to control private sector spending and curb inflation. The System imposed direct controls on consumer credit (through regulation W) by introducing minimum down payments and maximum maturities on consumer credit extended through installment loans. Because the reallocation of resources to military production restricted the supply of consumer durable goods, the controls imposed on consumer credit aimed to restrict the demand for these goods in an effort to reduce the pressure on prices. Another major action taken during the period was the increase in the reserve requirements of commercial banks in 1941. However, this measure, which was intended to restrain credit growth and the expansion of bank liabilities, had only a minor effect on the money supply and the trend in the price level. The end of the war did not mean that the System was automatically freed from Treasury influence. Six years would go by before monetary policy was revived as a major instrument to influence aggregate spending and prices. In March 1951, the System’s policy independence from the Treasury was accomplished with the formal agreement between the Treasury and the System known as the Treasury-Federal Reserve Accord. What was a consequence of World War 2?Britain and France lost most of their empires due to World War II. Germany, Italy, and Japan were conquered and occupied. The Soviet Union lost its most productive citizens—more than twenty million died in the war.
What are the causes and consequences of World War 2?The major causes of World War II were numerous. They include the impact of the Treaty of Versailles following WWI, the worldwide economic depression, failure of appeasement, the rise of militarism in Germany and Japan, and the failure of the League of Nations.
What was a negative consequence of WWII?One of the main negative results of the Second World War is the number of deaths from both sides of the conflict. There are still no definite numbers on how many people died in that terrible war. Parker R. A. C. (2001) mentions that about 20 million people were killed in the Soviet Union and it was only citizens.
What were the social consequences of ww2?New families were created as women married servicemen of other nations and moved overseas; children were born in fatherless homes as a result of demobilised troops leaving the UK to return to the US or Canada or due to a death as a result of the war; and the divorce rate spiked as many families struggled to re-adjust ...
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Consequences of World War 2 Essay
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