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What do you think would have been the “consequences to the economy of the United States” if the Marshall Plan had not been put into effect?

User YSK
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1 Answer

14 votes
14 votes

Answer:

The US economy would have stagnated due to a lack of foreign demand

Step-by-step explanation:

A huge contributor to the post-War explosion in US economic growth was demand and competition from previously devastated European countries after World War II. Giving foreign economies large sums of financial aid meant that they could rebuild the productive capacity of their economies, restoring high levels of economic growth and rebuilding the incomes of their citizens. As nations become wealthier they will demand more goods and services, so as European countries rebuilt there was a heavy demand for American products, which boosted US economic growth. Similarly, with the economies of other nations restored things such as innovation could take place, allowing consumers in the US to benefit from the lower prices or improved products invented in other nations but only as the result of a rebuilt productive capacity. So, without the Marshall Plan, the US would have at least stagnated with a huge lack of demand and activity from its allies.

User Kelsadita
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