Question

How did the government raise most of the funds for World War I?

A) They sold bonds to ordinary American citizens.
B) They gave tax cuts to citizens who donated money.
C) They increased import tariffs for non-allied nations.
D) They raised income taxes and taxes on excess profits.

Answer 1

The U.S. government financed World War I primarily through the sale of war bonds to American citizens, as enabled by the Liberty Loan Act, along with the collection of federal income tax revenue. The correct answer to the question is A) They sold bonds to ordinary American citizens.

Step-by-step explanation:

The government raised most of the funds for World War I primarily through selling war bonds to ordinary American citizens. This method was part of the Liberty Loan Act, which allowed the federal government to sell liberty bonds, and was a significant part of the American public's contribution to the war effort. Americans were exhorted to “do their part” and the campaign was quite successful, raising a significant portion of the war's costs.

In addition to war bonds, the government also utilized federal income tax revenue, leveraging the recent passage of the Sixteenth Amendment in 1913, which made the collection of this tax possible. Therefore, the correct answer to the question is A) They sold bonds to ordinary American citizens.