Which of the following was NOT a consequence of World War I spending in the United States from 1916 to 1920?

• A. Increased unemployment rate
• B. Increased defense spending
• C. Economic growth
• D. Budget deficits reduced

Answer: (A)

The main idea here is how wartime spending affected the U.S. economy between 1916 and 1920. When the United States mobilized for World War I, federal outlays for defense surged, directing a lot of resources into ships, weapons, and soldiers. This spike in government spending fed a surge in production and labor demand. Jobs multiplied as factories converted to war production, pulling unemployment down rather than up, and overall economic activity expanded. At the same time, financing the war meant large budget deficits, so deficits grew rather than shrinking. So, during this period, defense spending rose, the economy grew, and deficits increased.

Therefore, the statement that unemployment rose is not aligned with what happened in that wartime window; it didn’t reflect the typical impact of the spending surge.