Series J 30-48 - Manufacturing Production Indexes by Groups (Federal Reserve Board): 1919 to 1945

\begin{tabular}{|c|c|c|c|c|c|c|}
\hline
\multirow{3}{}{YEAR} & \multirow{2}{}{\begin{tabular}{l}
TOTAL \\
MANUFACTURES
\end{tabular}} & \multicolumn{5}{|c|}{DURABLE MANUFACTURES} \\
\hline
& & \begin{tabular}{l}
Total, \\
durable
\end{tabular} & \begin{tabular}{l}
Iron and \\
steel
\end{tabular} & Machinery & \begin{tabular}{l}
Transportation \\
equipment
\end{tabular} & \begin{tabular}{l}
Lumber and \\
products
\end{tabular} \\
\hline
& 30 & 31 & 32 & 33 & 34 & 36 \\
\hline
1945 & 214 & 274 & 183 & 343 & 487 & 109 \\
\hline
1944 & 252 & 353 & 206 & 439 & 719 & 125 \\
\hline
1943 & 258 & 360 & 208 & 448 & 735 & 129 \\
\hline
1942 & 212 & 279 & 199 & 340 & 464 & 134 \\
\hline
1941 & 168 & 201 & 186 & 221 & 245 & 134 \\
\hline
1940 & 126 & 139 & 147 & 136 & 145 & 116 \\
\hline
1939 & 109 & 109 & 114 & 104 & 103 & 106 \\
\hline
1938 & 87 & 78 & 68 & 82 & 72 & 90 \\
\hline
1937 & 113 & 122 & 123 & 126 & 123 & 113 \\
\hline
1936 & 104 & 100 & 114 & 105 & 110 & 105 \\
\hline
\end{tabular}

Which conclusion is supported by information in this chart?

A. American households had little disposable income during World War II.



Answer :

To determine the accurate conclusion drawn from the given data about manufacturing production during World War II, we need to analyze the trend of the “Total Manufactures” index observed in the chart:

1. Identify the relevant time frame: World War II took place from 1939 to 1945, with the crucial war years being 1941 to 1945 for the United States.

2. Analyze the trend in the “Total Manufactures” index:
- 1941: 168
- 1942: 212
- 1943: 258
- 1944: 252
- 1945: 214

These numbers indicate significant increases in manufacturing production from 1941 onwards, peaking in 1943 and 1944.

3. Contextual understanding of the data:
- The substantial rise in manufacturing production output during these years can be closely linked to the demands of the wartime economy. Typically, war effort leads to increased manufacturing for military supplies and equipment.
- The heightened production levels demonstrate a booming manufacturing sector, driven by government and military contracts, which contributed to an overall economic boost during this period.

4. Conclusion:
- Given the robust manufacturing output, it's implausible to infer that American households had very little disposable income during this period. Instead, manufacturing was flourishing, which often accompanies economic vitality. More jobs and higher production typically lead to better income distribution across various sectors.

Thus, the correct conclusion is:

B. The key point is that the significant rise in manufacturing production indices during World War II indicates that the economy was experiencing a boom likely driven by wartime production, and there's no evidence to suggest that American households had little disposable income.

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