Final answer:
Roosevelt's use of a draft and income tax to fund WWII exemplifies how the US government economically intervened during wartime, financing the effort through taxes and borrowing, while regulating the economy to encourage production and prevent inflation.
Step-by-step explanation:
Roosevelt's implementation of a draft and income tax to prepare for World War II is an example of how the government intervened in the economy to mobilize for war. Corporate and personal income taxes financed a significant portion of the war's cost, while the government also borrowed heavily to cover the remainder, which included the selling of war bonds to private citizens. This strategy was integral to converting America into "the arsenal of democracy," ensuring the military was well-equipped and the economy was robust enough to support the war effort. Roosevelt's approach blended free enterprise with unprecedented levels of government intervention, using tax incentives, loans, and guaranteed profits to encourage businesses to meet production goals, and through agencies like the Office of Price Administration regulating costs to prevent inflation.