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FEDERAL RESERVE BANK OF ST. LOUIS

ECONOMIC EDUCATION

The Arsenal of Democracy:
The United States in World War II
Lesson Author
Scott Wolla, Federal Reserve Bank of St. Louis

Standards and Benchmarks (see page 36)
Lesson Description
In this lesson, students use economic data and wartime propaganda to learn important
lessons about resource scarcity on the World War II home front. Using a gallery walk,
students analyze propaganda techniques to identify how the government attempted
to use propaganda to increase the number of resources available for the war effort
and reallocate resources from production of consumer goods to military goods. Then,
students use a production possibilities frontier (PPF) to discuss how countries allocated
resources between “guns” and “butter.” Students learn that several factors, including
increased labor force participation by women during WWII, increased U.S. output to
accomplish what President Franklin D. Roosevelt envisioned when he called on the
United States to become the “arsenal of democracy.” Finally, students apply historical
data to the PPF and analyze how resource allocation changed from 1939 to 1950.

Compelling Question
How did the United States increase production of war goods during World War II?

Grade Level
7-12

Concepts
Capital resources
Labor
Land
Opportunity cost
Production possibilities frontier (PPF)

© 2014, Federal Reserve Bank of St. Louis. Permission is granted to reprint or photocopy this lesson in its entirety for educational
purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education.

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Productivity
Propaganda
Scarcity
Trade-off
Underutilized

Objectives
Students will be able to
•

identify economic resources;

•

describe how changes in the level of economic resources increase total production;

•

analyze visual propaganda to identify economic messages from the government;

•

analyze the guns or butter trade-off of war using the PPF;

•

describe how the government used propaganda efforts to shift the PPF outward;
and

•

describe the change in the guns or butter trade-off from the end of the Great
Depression to World War II and from the end of World War II to 1950.

Time Required
75 minutes

Materials
•

Handouts 1-4, one copy of each for each student

•

Handout 5, nine copies (printed two-sides )

•

Handout 6, one copy for each student

•

Handout 7, one copy for each student

•

Four pieces of poster or flip chart paper

•

Post-it notes (4 sets)

•

Construction paper, several sheets and colors

•

Four rolls of tape

•

Four pairs of scissors

•

One red and one blue pencil (or crayon) for each student

© 2014, Federal Reserve Bank of St. Louis. Permission is granted to reprint or photocopy this lesson in its entirety for educational
purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education.

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Procedure
1.

Introduce the lesson by asking the following:
•

What things come to mind when you think of WWII? (Students will likely mention
cannons, guns, soldiers, war planes, Nazis, Adolf Hitler, Franklin Roosevelt, and
Winston Churchill.)

•

Were there any major battles on American soil? (Aside from Pearl Harbor, no; the
major war fronts were in Europe and Asia.)

•

What was happening in the United States during that time? (Answers will vary.)

2.

Explain that while most of the attention during WWII was focused on the battlefield,
there were a number of economic changes going on in the United States to support
the battlefield.

3.

Display Slide 2. Ask students to look at the FRED® graph of the Industrial Production
Index. Explain that these data provide a measure of the production of goods in factories
from 1928 to 1946. Discuss the following:

4.

•

What is the period from 1929 to 1939 called? (The Great Depression)

•

Explain that the shaded areas indicate recessions—economic downturns. Within
the period of the Great Depression (1929 to 1939) there were actually two severe recessions.

•

When, specifically, did these recessions within the Great Depression occur? (From
1929 to 1933, another from 1937 to 1938. Students might also notice the recession that occurred in 1945.)

•

What does the graph show was happening to industrial production during the
Great Depression? (Industrial production declined steadily from the business cycle
peak in mid-1929 to the end of the recession in 1933. Industrial production recovered somewhat, but then suffered a steep decline in the recession from 1937
to 1938.)

•

What happened to the economy in general during the Great Depression? (The
economy suffered a severe contraction—that is, national income and output fell
sharply, by about one-third.)

•

What happened to industrial production between 1938 and 1945? (It increased
dramatically.)

•

What was happening in the world during much of this time period? (World War II)

Explain that the recession ended in June 1938 and that the graph index is equal to 100
at that time. In 1944, the index was equal to 293.4; this means that industrial production was nearly three times higher in 1944 than in 1938. Discuss the following:
•

How was the U.S. economy able to increase industrial production nearly three
times above what it had been just six years earlier? (Answers will vary.)

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

5.

Remind the students that the United States had just weathered the Great Depression,
which means many economic resources were not being used to their potential. But
these resources were still available for use. For example, many people were unemployed
and many factories and warehouses sat empty and unused. Even so, this does not
fully explain the dramatic increase in production.

6.

Display Slide 3. Tell the students to examine the images. Explain that these images were
common in the United States during WWII. Discuss the following:

7.

8.

•

Who is the character depicted in Image 1? (Uncle Sam)

•

Who does Uncle Sam represent? (The U.S. government)

•

What is the intended message? (Uncle Sam wants people to enlist in the U.S. Army.)

•

How did the artist portray Uncle Sam? (He is determined, bold, and wearing red,
white, and blue—patriotic colors).

•

Ask students to describe what is happening in Image 2. (Two men are featured;
one is in battle and the other is producing something in a factory.)

•

What is the intended message? (There are two ways to fight in the war: going
into battle and building goods for the war.)

•

Tell the students that Image 3 is a famous WWII poster. The woman in the poster
is known as Rosie the Riveter.

•

What is the intended message? (Women can work hard and contribute to the
war effort.)

•

How did the artist portray Rosie the Riveter? (Rosie is wearing red, white, and
blue—patriotic colors. She is pictured as strong and dressed for manual labor,
which was an unusual portrayal of women in the 1940s. Rosie appears determined
and confident.)

Explain that these posters were sponsored by various U.S. government agencies. Discuss
the following:
•

What similarities do you see in the posters? (They encourage people to join the
war effort and contribute where they can.)

•

What differences do you see in the posters? (The first encourages people to join
the armed forces; the second encourages people to work in U.S. factories; the
third shows a woman actively involved in the war effort.)

•

Why do you think the U.S. government wanted people to do these things? (Many
people were needed to fight in the war directly; others were needed to produce
the goods necessary to fight the war.)

Display Slide 4. Read the Roosevelt quote and discuss the following:

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Lesson Plan

9.

The Arsenal of Democracy: The United States in World War II

•

Was the United States fighting in the battlefields when President Roosevelt made
this speech? (No, the speech was given in 1940; the United States had not yet
entered the war.)

•

What was President Roosevelt calling the American people to do? (Answers will
vary.)

•

The “arsenal of democracy” slogan was popularized by President Roosevelt in a
speech in which he called on the American people to contribute to the war effort
by producing the war goods necessary to fight the advance of Nazi Germany.

•

President Roosevelt promised the United States would help the United Kingdom
fight Nazi Germany by lending and leasing military supplies to that country.

•

President Roosevelt hoped the United States would be the arsenal of democracy
because it would supply so many goods and weapons to its allies.

•

Once the United States entered the war on December 8, 1941 (the day after the
bombing of Pearl Harbor), a large segment of the traditional American workforce
(men) became actively involved in fighting the war. This left a much smaller number of men to produce goods and services.

•

The needs of war were tremendous. Not only did the United States produce the
goods it needed to fight the war, the country also continued to supply weapons
and other goods to its allies, Great Britain and the Soviet Union.

Explain that goods and services are produced using economic resources; these economic
resources are land, labor, and capital. Display Slide 5 and define the economic resources.
•

Land (or natural) resources are things that occur naturally in and on the earth
that are used to produce goods and services.

•

Labor is the quantity and quality of human effort directed toward producing
goods and services. Also known as human resources.

•

Capital resources are goods that have been produced and are used to produce
other goods and services. They are used over and over again in the production
process. Also called capital goods and physical capital.

10. Explain that land, labor, and capital resources are scarce as follows:
•

Scarcity is the condition that exists because there are not enough resources to
produce everyone’s wants. Because we don’t have enough resources to produce
everything we want, we must choose which goods and services to produce.

•

Scarcity forces people to make trade-offs. A trade-off involves giving up some of
one thing to gain some of something else. In other words, using a resource one
way means that it cannot be used in another way.

•

When individuals or nations make a choice regarding how they will use their
resources, they incur an opportunity cost, which is the value of the next-best
alternative when a decision is made; it’s what is given up.

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

•

For example, during World War II factories and workers used to produce tanks
for the war effort could not be used to produce automobiles for consumers.

•

In this case, the opportunity cost of using a factory and workers to produce tanks
is the lost opportunity to use the same resources to produce automobiles.

11. Display Slide 6. Explain that the posters viewed are labeled propaganda, which is communication meant to influence the attitude of people toward some cause or position.
While propaganda can be used in a variety of ways, in this lesson we will focus on the
ones the government primarily used during WWII:
•

Appealing to fear—Building support by instilling anxieties and panic in the general
population.

•

Flag waving (patriotism)—Justifying an action on the grounds that doing so will
make one more patriotic or in some way benefit a country, group, or idea the
targeted audience supports.

•

Jumping on the bandwagon—Promoting involvement based on the idea that
“everyone else is doing it, and so should you.”

12. Display Slide 7 (which features the same posters shown earlier in the lesson) and ask
students to analyze each poster to determine which propaganda strategies are evident.
•

Poster 1: What propaganda technique is portrayed? (Flag waving: Uncle Sam wears
red, white, and blue and is a national symbol of patriotism.)

•

Poster 2: What propaganda technique is portrayed? (Flag waving: This is work
contributing to victory. Jumping on the bandwagon: It shows men engaged in
different activities.)

•

Poster 3: What propaganda technique is portrayed? (Flag waving: Rosie is dressed
in red, white, and blue—patriotic colors. Jumping on the bandwagon: The “we”
implies joining a cause for the greater good. )

Gallery Walk
13. Divide students into four groups. Give group 1 Handout 1: Wartime Natural Resources;
give group 2 Handout 2: Wartime Human Resources; give group 3 Handout 3: Wartime
Capital Resources; and give group 4 Handout 4: Conservation of Resources. Tell the
students they will be participating in a gallery walk. Distribute construction paper, scissors, tape, flip chart/poster board, and Post-it notes to each group. Explain the following:
•

During this activity, you will work in your groups to view and analyze several
examples of propaganda to determine (i) how the government used propaganda
to motivate people to specific actions and (ii) which propaganda strategies are
involved.

•

Cut, frame, arrange, and tape your group’s propaganda posters (supplied in the
handouts for each group) to a wall or pin to a bulletin board to create a “gallery”
display.

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Lesson Plan
•

The Arsenal of Democracy: The United States in World War II

Read your handout, analyze the posters, and answer the questions on the handout.

14. Summarize your analysis on the flip chart paper and tape it next to your group’s gallery
display.
15. When the displays are completed, explain the following:
•

Each group is to assign a docent who will act as an expert and stay with the
group display when the class moves around the room to review the displays.

•

The other group members will rotate as a group to the other stations, spending
5 minutes at each station.

•

Examine and analyze the propaganda and the answers provided by the host group.

•

Ask the docents any question you might have about the posters.

•

Each group should leave Post-it notes with at least two comments at each station.
One comment should begin “We like…” (giving positive feedback) and another
should begin “We wonder…” (offering constructive feedback).

•

After all groups have visited each station, the host group will examine the feedback
and reevaluate its original analysis. Additional information can be added to the
flip chart paper.

16. Allow time for students to complete the activity and then discuss the following:
•

Why do you think the government was so interested in motivating people to
action? (The war effort required total citizen participation, even by those who
were not actively fighting.)

•

What types of propaganda seemed most common in our examples? (Appealing
to fear and flag waving).

•

Do you think the propaganda was effective? (Answers will vary.)

•

If you were living during that period, what messages do you think you would
have found the most effective? (Answers will vary.)

Guns or Butter
17. Tell the students that each gallery walk station had a theme that dealt with the economic
resources available to the country or how it used those resources.
18. Explain that during “normal” times it is the interaction of consumers and firms in the
marketplace that determines what gets produced and how resources are used. However, during wartime, these decisions are sometimes made by the government. In fact,
during a war these decisions are often discussed as “guns or butter” decisions. The
word “guns” does not literally mean guns and the word “butter” does not literally
mean butter.

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purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education.

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

19. Display Slide 8. Ask the students what they think the terms “guns” and “butter”
represent in the quotes. (Answers will vary.)
•

Goebbels: “We can do without butter, but, despite all our love of peace, not
without arms. One cannot shoot with butter, but with guns.” (Goebbels wanted
resources to be spent on arms—guns—rather than consumer goods—butter.)

•

Goering: “Guns will make us powerful; butter will only make us fat.” (Goering
wanted resources to be spent on guns to make Nazi Germany powerful.)

20. Explain that the word “guns” is often used to represent the production of military
goods and services produced for national defense (e.g., weapons, tanks, and warplanes) or, in the context of WWII, any good allocated to the war effort. The word “butter” is often used to represent nonmilitary goods and services produced for
consumption by citizens (e.g., food, cars, education, and medical care).
21. Remind students that many resources were reallocated during the war effort. Discuss
the following:
•

Much land that was used for production of food for domestic consumption was
used for production of food that was sent overseas to soldiers and allies.

•

How did shipping food overseas to soldiers and allies affect the supply of food at
home? (There were shortages of basic commodities. People grew their own produce in victory gardens. Rationing was used to allocate some of these goods.)

•

Many people who provided labor resources producing consumer goods and services before the war volunteered or were drafted into the military.

•

Who took the place of working men who were drafted into military service?
(Many men who would have previously been considered too young or too old to
work joined the labor force. Many women also joined the labor force.)

•

Many factories (capital) that once produced consumer goods (e.g., sewing
machines) were retooled to produce military goods (e.g., gun parts).

•

How did retooling factories alter the availability of consumer goods at home?
(Many consumer goods were no longer available or shortages existed. People were
encouraged to reuse old goods when they might have normally purchased new
goods. Rationing was used to allocate goods that where shortages existed.)

22. Display Slide 9. Explain that in 1953 President Dwight Eisenhower used the guns or
butter trade-off to describe the buildup of arms during the Cold War: “Every gun that
is made, every warship launched, every rocket fired signifies, in the final sense, a theft
from those who hunger and are not fed, those who are cold and are not clothed. This
world in arms is not spending money alone. It is spending the sweat of its labors, the
genius of it scientists, the hopes of its children.” Note that President Eisenhower was a
former U.S. Army five-star general and the Supreme Commander of the Allied Forces
in Europe during WW II. Discuss the following:

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

•

According to President Eisenhower, what trade-off exists between guns and butter?
(Using resources to build weapons means giving up the opportunity to produce
other goods and services.)

•

According to President Eisenhower, why is this trade-off about resources rather
than money? (When it creates arms, society is giving up feeding the hungry, building other things, inventing new things, and creating a better society for children
to grow up in.)

23. Explain that the guns or butter trade-off can be discussed using the production cards.
Hold up Handout 5: Guns or Butter Production. Show students that each production
card has guns on one side and butter on the other. Explain that the card represents a
nation’s ability to either produce 1 unit of guns (military goods) or 1 unit of butter
(consumer goods)—but not both. Discuss the following:
•

What likely happens to the production of butter during wartime? (As more
resources are used to produce guns, less butter will be produced.)

24. Explain that this trade-off illustrates opportunity cost, which is the value of the nextbest alternative when a decision is made; it’s what is given up. Discuss the following:
•

(Display the guns side of the card and then flip to the butter side.) What is the
opportunity cost of producing one unit of guns? (The opportunity cost is 1 unit
of butter.)

•

(Display the butter side of the card and then flip to the guns side.) What is the
opportunity cost is of producing one unit of butter? (The opportunity cost is 1 unit
of guns.)

25. Ask for six volunteers to stand at the front of the classroom. Give each student a production card (from Handout 5) with the butter side facing the rest of the class.
26. Distribute Handout 6: Production Possibilities. Have seated students complete Production Possibilities Table 1 using the information displayed by students in the front of the
classroom. Standing students should start with all six showing the butter side of their
card. Then slowly transition to the guns side by having one student at a time (from
left to right) turn his or her card from butter to guns. When finished, the table should
include the following information:
Handout 6: Production Possibilities—Answer Key
Production Possibilities Table 1
Production

A

B

C

D

E

F

G

Butter

6

5

4

3

2

1

0

Guns

0

1

2

3

4

5

6

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

27. After students have completed Production Possibilities Table 1, discuss the following:
•

If this nation were producing the combination shown at point D, what would its
production of guns and butter be? (This nation would produce 3 units of butter
and 3 units of guns.)

•

Imagine this nation chose to use all of its resources to produce military goods—
moving from point D to point G. How many units of military goods (guns) could
it produce? (6 units of guns)

•

How many units of guns would it gain by moving from point D to point G? (It
would gain 3 units of guns.)

•

How much butter would it have to give up to achieve that level of gun production? (It would give up 3 units of butter.)

•

In what way does this illustrate a trade-off? (The nation is giving up butter to gain
guns.)

•

In what way does this illustrate opportunity cost? (The opportunity cost of increasing the production of guns is the lost production of butter.)

28. Display Slide 10. Explain that economists have developed a model to discuss the tradeoff that nations face called the production possibilities frontier (PPF), which is a
graphic representation of output combinations that can be produced given an economy’s
available resources and technology. It is a useful tool for understanding economic
choices made by societies. It is also a useful model for understanding economic growth.
29. Explain that a production possibilities table can be used to produce a PPF (also on
Handout 6). Ask the students to plot the production points from Production Possibilities
Table 1 and then connect the points to create a PPF. Display Slide 11 and then discuss
the following:
•

The PPF is a graph that shows how a country might allocate scarce resources to
produce goods and services.

•

The PPF can be used to discuss the guns or butter trade-off that nations face
during war.

•

The line connecting points A-G is the PPF and represents the maximum quantity
of guns and butter an economy can produce with its current available resources.

•

Remember that economic resources are land (natural resources), labor (workers,
or human resources), and capital resources (goods used to produce other goods
and services).

•

A society might produce a combination reflected by point F, which shows a large
quantity of guns produced (5 units) and a much smaller quantity of butter produced
(1 unit). This society would enjoy a greater sense of security but it would have
fewer goods and services available for consumption.

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

•

Or, the society might produce the combination reflected by point B, which shows
a larger quantity of butter produced (5 units) and a much smaller quantity of guns
produced (1 unit). Now, the society has chosen to forgo some national security in
exchange for a higher level of consumption.

•

In both cases, the society is producing on the frontier, which indicates that the
society is using all of its available resources and producing at an efficient level.

30. Display slide 12. Explain that production at a point inside the PPF shows the resources
in the economy are underutilized. Discuss the following:
•

A society might produce at point X, which indicates a much smaller production
of both guns (2 units) and butter (2 units).

•

Production at a point inside the PPF (such as X) shows the resources in the economy are underutilized, which means the economy is using fewer resources than
it is capable of using, or it is not using resources to their fullest potential. Remind
students that as discussed earlier, this situation occurred during the Great Depression and might occur during an economic recession when some factories sit
idle and some workers are unemployed.

•

Societies would want to produce at a point outside their PPFs because they would
want more butter and more guns. Point Y is outside the frontier and shows production of 4 units of guns and 4 units of butter. However, this economy cannot
produce that combination because its current level of resources and technology
will not allow it to do so.

•

An economy might be able to produce the combination at point Y in the future if
the PPF shifts outward (to the right).

•

The PPF might shift to the right if the country acquires more resources (land, labor,
or capital).

•

The PPF might also shift to the right if the country experiences an increase in productivity. Productivity is measured as the ratio of output per worker per unit of
time. Increasing productivity allows a nation or firm to produce more output with
the same number of inputs (or the same amount of output with fewer workers).

31. Remind students of the gallery walk. Discuss the following:
•

What were some of the strategies used to increase resources (land, labor, capital)
and productivity, and therefore increase production during this time? (Answers
will vary but may include the following:
•

Resources that had been underutilized during the Great Depression were
put back into production.

•

Women entered the labor force, increasing labor resources.

•

People planted private “victory gardens,” which increased land resources.

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

•

The number of capital goods increased and capital goods were more fully
utilized. For example, factories often operated for much longer periods of
time.

•

Capital was reallocated from producing consumer goods (butter) to producing military goods (guns). While initially these capital goods might not have
been as productive in their new use because not all capital and workers
were well suited for the new task, as workers acquired training and more
experience, productivity likely increased.

•

People increased their output per person by working longer hours; this was
an increase in labor hours. While this did not change the number of workers,
the increase in labor hours was essentially an increase in labor resources.

•

People reduced, reused, and recycled resources. This increased the availability
of resources compared with what would have been available without these
efforts.)

32. Tell the students that the class will represent the increase in resources and productivity
by adding two new production cards to the production possibility table.
33. Ask two more students to join the others with production cards. Have students repeat
the process used earlier in the lesson to complete Production Possibilities Table 2 (bottom
of Handout 6).
Handout 6: Production Possibilities—Answer Key
Production Possibilities Table 2
Production

A

B

C

D

E

F

G

H

I

Butter

8

7

6

5

4

3

2

1

0

Guns

0

1

2

3

4

5

6

7

8

34. Ask the students to use the information on Production Possibilities Table 2 to draw a
new frontier line on their PPF graphs. Discuss the following:
•

What happened to the graph? (The frontier shifted outward [to the right].)

35. Display Slide 13. Discuss the following:
•

What caused the PPF to shift outward? (This shift was primarily due to an increase
in the number of resources.)

•

At the previous PPF position point Y, production of 4 units of guns and 4 units of
butter was unattainable. Can that combination be produced now? (Yes; the rightward shift of the frontier as a result of economic growth makes it possible to
produce 4 units of guns and 4 units of butter at point Y.)

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purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education.

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Lesson Plan
•

The Arsenal of Democracy: The United States in World War II

Why is a rightward shift of the PPF beneficial? (More guns and more butter can
be produced. Previously when production was on the frontier, an increase in the
production of butter meant giving up some guns or vice versa. When the PPF shifts
to the right, more of both types of goods can be produced. However, there are
still trade-offs along the new PPF.)

Historical Data
36. Tell the students they will examine historical data from WWII. During that time, government spending was a much smaller part of the total economy and most federal government spending was for defense purposes.
37. Display Slide 14. This graph shows the portion, expressed as a decimal, of total government spending dedicated to defense spending between 1930 and 1950. To convert a
decimal to a percentage, move the decimal to the right two spaces (e.g., 0.20 becomes
20 percent). Discuss the following:
•

Prior to 1940, approximately what percentage of spending by the federal government was allocated to defense? (Defense spending fluctuated between 20 and
30 percent of total government spending in the years just before 1940. In fact,
defense spending fluctuated between 24 percent and 27 percent of federal spending from 1936 to 1939.)

•

Between 1942 and 1945, approximately what portion of spending by the federal
government was allocated to defense? (Defense spending was above 90 percent
in each of those years. In 1943-45, it made up 97 percent of total government
spending.)

•

Explain that since nearly all government spending was for defense during the
war years, federal spending will be used to approximate spending on guns.

38. Display Slide 15. Distribute Handout 7: Guns Versus Butter Spending: 1929-1950. Ask
students to examine the data under the heading “Total gross national product (GNP)”
(column 1). Discuss the following:
•

GNP is a measure of total production by U.S. firms. During this period, GNP was
a good indicator of the size of the economy. Today, gross domestic product (GDP)
is the indicator used most often.

•

The data are stated in 1982 dollars, which means they have been adjusted for
inflation.

•

Based on the data in column 1, what happened to the size of the economy
between 1939 and 1944? (The economy nearly doubled in size, increasing from
$716.6 billion to $1,380.6 billion.)

39. Tell the students that the data in the remaining columns are from two sets of data:
federal purchases of goods and services and civilian purchases of goods and services.

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

•

The federal purchases (U.S. government spending) represent guns since much of
federal spending during this period was for defense purposes.

•

The civilian purchases represents butter—spending for consumer goods and
services.

40. Explain that the allocation decision between guns and butter changed dramatically
from 1939 to 1944. Even while the economy was producing more goods and services
(GNP), the share of production of goods and services was shifting from an emphasis
on butter to an emphasis on guns.
41. Tell the students that the answers to the following questions are in columns 3 and 5
and should be stated as percentages:
•

In 1939, what percentage of GNP was spent on guns—military goods and services—by the federal government? (7.51 percent)

•

In 1939, what percentage of GNP was spent on butter—consumer goods and
services—by civilians? (92.49 percent)

•

In 1939, was the emphasis on guns or butter? (Nearly all spending was on butter,
or consumer goods.)

•

How did the proportion of resources allocated to guns change from 1939 to
1944 (use column 3)? (In only five years, guns increased from 7.51 percent to
52.33 percent of total production.)

•

In 1950, what percentage of GNP was spent on guns by the federal government?
(9.70 percent)

•

In 1950, what percentage of GNP was spent on butter by civilians? (90.30 percent)

•

How did the guns and butter trade-off change from 1944 to 1950? (In only six
years, spending on guns decreased from 52.33 percent to 9.70 percent of GNP
and spending on butter by civilians increased from 47.67 percent to 90.30 percent.)

42. Remind students that the United States officially entered WWII on December 8, 1941,
and the war ended in 1945. Discuss the following:
•

Stated in a few words, how did the guns or butter trade-off shift (i) between
1939 and 1944 and (ii) by 1950? (Production shifted toward guns before and
during the war and then back toward butter after the war.)

43. Explain that the total production of goods and services increased dramatically. Refer
students to the GNP column (column 1). Remind students that these figures are adjusted for inflation, so changes in the stated dollar value reflect changes in output.
Discuss the following:
•

Did GNP change much between 1929 and 1939? (No, the economy had about
the same output in 1929 as 1939.)

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

•

What was happening in the United States between 1929 and 1939? (The Great
Depression)

•

How much did GNP change between 1939 and 1944? (Output nearly doubled,
from $716.6 billion to $1,380.6 billion.)

•

How was the U.S. economy able to increase production so dramatically from
1939 to 1945? (Many resources that were underutilized in 1939 were easily put
back into production. Also, the war mobilization meant that many new resources
were added, such as women entering the workforce.)

44. Refer students to columns 2 and 4 on Slide 15. Remind students again that the figures
are adjusted for inflation, so changes in the stated dollar value reflect changes in output.
Discuss the following:
•

How did the spending on butter—civilian goods and services—change from
1939 to 1944? (It very slightly decreased: from $662.8 billion to $658.1 billion.)

•

How did the spending on guns—military goods and services—change from 1939
to 1944? (It increased nearly 14 times: from $53.8 billion to $722.5 billion.)

45. Tell the students to use the data in columns 2 and 4 in the table to plot each year on
the PPF on Handout 7.
46. Tell the students to connect the points from 1929 to 1945 (in chronological order)
using a red crayon (or pencil) and the points from 1945 to 1950 using a blue crayon
(or pencil). Display Slide 16 as a reference. Discuss the following:
•

Follow the red line you drew. What happened to spending from 1929 to 1945?
(Spending on consumer goods remained relatively flat, but spending on guns
increased greatly.)

•

Follow the blue line you drew. What happened to spending from 1945 to 1950?
(Spending shifted back toward butter.)

47. Explain that it is difficult to know for sure where the PPF was in 1939 because relatively
little economic data were collected then and the nation was emerging from the Great
Depression—a time when many resources were underutilized. The civilian unemployment
rate dropped from 20 percent in June 1938 to 3.4 percent in August 1941, which indicates a large transition in resource utilization.1
48. Explain that you will use 1941 as the first frontier and assume that the war mobilization had brought the economy to near-full utilization. Instruct students to draw a
curved line that intersects the 1941 data point. Display Slide 17 for reference. Explain
the following:
•

Starting in 1941, the efforts to bring more resources to market and increase the
utilization of resources were already being used.

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Lesson Plan
•

The Arsenal of Democracy: The United States in World War II

By October 1944, the unemployment rate had reached 0.9 percent, which indicates
that nearly everyone who wanted a job was able to find work.2

49. Explain that you will use the 1944 data point as the second frontier. Instruct students
to draw a curved line that intersects the 1944 data point. Display Slide 18 for reference. Explain the following:
•

The increase in resources and productivity shifted the PPF outward, or to the right.

50. Point out to the students that Slides 17 and 18 feature curved lines but the lines were
straight in the quantity of butter and guns graph created earlier in the lesson (Slide 13).
Explain the following:
•

In a large, diverse economy such as the United States, some resources are better
suited to some tasks than others.

•

For example, some of the workers who went to work in the factories building aircraft (guns) might have been farmers before the war (producing butter). Over many
years of farming they had likely become very efficient and productive, but when
they went to work in the factory they had to learn new skills, and (at least for a
while) were not as productive at that task.

•

As a result, when a worker transitioned from butter production to guns production,
there was a loss of butter production that was greater than the gain to guns.

•

The loss of production concept is true for many resources, not only farmers.

•

So, because not all resources are equally good at all tasks, in reality the PPF for an
entire economy is concave.

51. Refer again to Slide 18. Discuss the following:
•

Where is the 1939 frontier in reference to the 1941 frontier? (1939 is well inside
the frontier, which means many resources were underutilized.)

•

Why were so many resources underutilized in 1939? (The United States was just
emerging from the Great Depression.)

•

In 1939, which had higher production, guns or butter? (Butter, or civilian goods)

•

In 1944, which had higher production, guns or butter? (Guns, or military goods)

•

Why did the PPF shift to the right by 1944? (More resources were added and
productivity had increased.)

•

Why had production shifted back toward butter by 1950? (WWII ended in 1945,
and many resources that had been used to produce guns were now used to produce butter.)

•

The mix of guns and butter in 1939 was similar to the mix in 1950 (in percentage
terms). What was the major different between 1939 and 1950? (The economy
was much larger; there was much more production of butter in 1950.)

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Closure
52. Review the important content of this lesson by asking the following:
•

What is propaganda? (Communication meant to influence the attitude of the
people toward some cause or position)

•

What propaganda strategies did the U.S. government use during WWII? (Appealing to fear, flag waving [patriotism], and jumping on the band wagon)

•

What are the economic resources used to produce goods and services? (Land,
labor, and capital)

•

What is scarcity? (The condition that exists because there are not enough resources
to produce everyone’s wants.)

•

What is a trade-off? (Giving up some of one thing to gain some of something else)

•

Explain the guns or butter trade-off. (Producing more guns—military goods—
means producing less butter—civilian goods.)

•

What is a PPF? (A production possibilities frontier; a graphic representation of
output combinations that can be produced given an economy’s available resources and technology)

•

What shifts a PPF outward? (An increase in economic resources [land, labor, or
capital] or an increase in productivity)

•

How did WWII change U.S. production decisions in terms of guns and butter?
(The United States shifted its production so that it made less butter—civilian
goods—and more guns—military goods.)

•

Women, the old, and the young entered the workforce. What economic resource
increased and what did it do to the PPF? (Labor resources increased, shifting the
PPF to the right.)

•

Many African Americans moved from agricultural jobs in the South that relied on
manual labor to factory jobs in industrial centers with more physical capital. This
access to physical capital likely led to higher productivity. How might this shift in
productivity shift the PPF? (An outward shift, or a shift to the right)

•

People grew victory gardens. What economic resource increased and how did it
shift the PPF? (Land resources increased, shifting the PPF to the right.)

•

People worked longer hours. What economic resource increased and how did it
shift the PPF? (Labor resources increased, shifting the PPF to the right.)

•

What happened to U.S. production after WWII in terms of guns and butter?
(Production shifted back toward butter—civilian goods and services.)

NOTES
1
Data are from Federal Reserve Economic Data (FRED®), Federal Reserve Bank of St. Louis;
https://fred.stlouisfed.org/graph/?g=DqV.
2

Data are from FRED®, https://fred.stlouisfed.org/graph/?g=Iqj.

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purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education/resources.

17

Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 1: Wartime Natural Resources (page 1 of 3)
Land (or natural) resources occur naturally in and on the earth; they are used to produce
goods and services. One common use of land resources is the land required for food production. In addition to producing food for its citizens and soldiers fighting overseas, during WWII
the United States also produced food for several of its European allies. Producing the extra
food needed to win the war meant more crops had to be planted and more land resources
were needed.
An example of new crop production was victory gardens, which were vegetable, fruit, and
herb gardens planted at private residences and public parks. The purpose of victory gardens
was to stretch the food supply during a time when food was being sent overseas for soldiers
and to help feed U.S. allies. At the peak of victory gardens, nearly 20 million American participated. It has been estimated that these gardens produced up to 40 percent of the vegetables consumed in the United States. First lady Eleanor Roosevelt even planted a victory garden
on the White House grounds.
It is important to remember that land resources are scarce. Scarcity is the condition that exists
because there are not enough resources to produce everyone’s wants. Because we don’t
have enough resources to produce everything we want, we must decide which goods and
services to produce and how much of each. When we make these decisions, we make tradeoffs, which involve giving up some of one thing to gain some of something else. In other
words, using a resource one way means that it cannot be used in another way.
For each of your posters, answer the following questions:
•

What is the message conveyed?

•

What action is the viewer being called to take?

•

Which of these propaganda techniques are used: appealing to fear, flag waving
(patriotism), jumping on the bandwagon?

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purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education.

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 1: Wartime Natural Resources (page 2 of 3)

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 1: Wartime Natural Resources (page 3 of 3)

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purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education.

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 2: Wartime Human Resources (page 1 of 4)
Labor is the quantity and quality of human effort directed toward producing goods and services. This resource is used in the production of nearly all goods and services. In addition to
producing goods and services for its citizens, during WWII the United States also produced
weapons for U.S. soldiers and supplied weapons for several of its European allies. Many men—
who made up most of the workforce prior to the war—joined or were drafted into the armed
forces and were no longer available to produce goods and services. So, the demand for goods
and services increased just as a large segment of the labor force was reallocated to fight the
war.
Because of the need for workers to support the war efforts, many men who would have previously been considered too young or too old to work joined the labor force. Many women
also joined the labor force, marking a major transition for woman. In that era, many women
left the workforce when they married and worked in the home caring for children and managing the household. During WWII, women of all ages transitioned from working in the home
to joining the formal workforce. Consider the following facts:
•

By the end of the war, 18 million women worked outside the home, 50 percent
more than in 1939.

•

While many women worked in white-collar (office) jobs, many also worked in shipbuilding, aircraft, and munitions factories.

•

In white-collar settings in the 1940s, the number of women employed in secretarial
or clerical work increased fivefold.

•

Rosie the Riveter became an American icon; the image was used to encourage
women to join the labor force.

•

After the war, women who worked in factory jobs were expected to step aside and
return to their traditional roles working in the home so that the men returning from
the war would have jobs.

WWII also created opportunities for some minority groups. Racial discrimination and segregation was still prevalent in the United States, but labor shortages during WWII opened the
door for many African Americans to numerous jobs that had not been available to them before
the war. While African Americans gained some rights, many Japanese Americans were placed
in internment camps and German and Italian Americans also faced discrimination/persecution.
The end of the war did not bring an end to discrimination in the labor markets for women or
minorities. Both groups did gain work experience, however, and perhaps a sense of equality
that contributed to the later civil rights movement.
For each of your posters, answer the following questions:
•

What is the message conveyed?

•

What action is the viewer called to take?

•

Which of these propaganda techniques are used: appealing to fear, flag waving
(patriotism), jumping on the bandwagon?

© 2014, Federal Reserve Bank of St. Louis. Permission is granted to reprint or photocopy this lesson in its entirety for educational
purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education.

21

Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 2: Wartime Human Resources (page 2 of 4)

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purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education.

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 2: Wartime Human Resources (page 3 of 4)

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 2: Wartime Human Resources (page 4 of 4)

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 3: Wartime Capital Resources (page 1 of 3)
Capital resources are goods that have been produced and are used to produce other goods
and services. They are used over and over again in the production process. They are sometimes
called physical capital or capital goods. Capital resources are used in the production of many
goods, including the heavy weapons that were used in WWII. Capital resources are very important because they allow a company or country to increase its productivity.
Productivity is measured as the ratio of output per worker per unit of time. Increasing productivity allows a nation or firm to produce more output with the same number of inputs (or
the same amount of output with fewer workers). During WWII, the United States had fewer
resources to devote to the production of consumer goods and services because resources were
redirected to producing military goods. As a result, productivity and physical capital resources
were important to the war effort.
During World War II many companies that normally produced consumer goods and services
before the war produced military goods during the war. For example, Hillerich & Bradsby, the
company that produced Louisville Slugger baseball bats before the war, made M1 carbine
stocks during the war. Singer, a company that made sewing machines before the war, made
M1 rifle receivers during the war. General Motors, which produced cars and trucks for consumers and businesses before the war, made tanks and airplane engines during the war. Initially, the capital goods used to make new resources might not have been as productive as
they had been because not all capital goods (and the workers who operated them) were
as well suited for the new task as the task they were designed for. For example, not all the
machines designed for baseball bat production were well suited to making stocks for army
rifles and workers who were very skilled at baseball bat production might have initially been
less productive producing rifle stocks. However, as workers acquired training and more experience, productivity increased as the war progressed. These gains in productivity are due to
gains in human capital, which is the knowledge and skills that people obtain through education, experience, and training.
Several WWII propaganda posters called for “more production.” This usually meant that factories were open for longer hours and/or more days per week and workers worked longer
hours and/or more days per week. These increases in production were due to increases in
resource utilization. A worker who worked more hours per week was supplying a greater
quantity of labor resources than before. Physical capital that was operated longer hours was
more fully utilized than before. In both cases, the result was more output.
For each of your posters, answer the following questions:
•

What is the message conveyed?

•

What action is the viewer called to take?

•

How does this action suggest a change in output?

•

Which of these propaganda techniques are used: appealing to fear, flag waving
(patriotism), jumping on the bandwagon?

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purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education.

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 3: Wartime Capital Resources (page 2 of 3)

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 3: Wartime Capital Resources (page 3 of 3)

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 4: Conservation of Resources (page 1 of 4)
Conservation
In this era, people generally did not recycle because environmental awareness was not as
prevalent as it is today. Because many resources were needed for the war effort, however,
there was a need for people to conserve resources and recycle.
Before these terms became popularly associated with environmentalists, they were evident
in WWII strategy:
•

Reduce—Americans were encouraged to reduce their use of resources. Whether
asked to drink less coffee or share rides to reduce fuel consumption, the intent was
to reduce consumption domestically to increase the ability to supply troops and
allies with the resources necessary to win the war. A rationing system was set up
to reduce and restrict the consumption of many goods, such as tires, shoes, sugar,
coffee, and fuels. Rationing was a way of allocating scarce resources when consumers had more money to spend than there were goods available to buy. Normally,
the price mechanism allocates scarce resources—the prices of products in greater
demand are bid up until supply equals demand. However, in wartime, the government instituted rationing to allocate goods to consumers to avoid inflation.

•

Reuse—Americans were encouraged to reuse resources to reduce the need for consuming newly produced goods that were needed for the war effort. An example
would be wearing clothing longer to avoid buying new clothing. The fabric saved
could be used for military uniforms, blankets, and parachutes.

•

Recycle—Americans were encouraged to save key resources for recycling. Again, this
would reduce the resources needed to produce these goods, which would help
conserve resources for the war effort. Examples of commonly recycled goods included
tin cans, metals, and even the fats left over from cooking meat.

The posters illustrate the economic concept of scarcity of resources, because our nation’s
resources are limited—domestic conservation meant that resources not used at home could
instead be used to fight the war. As a result, it was important for people to use resources
very wisely and to reduce, reuse, and recycle when possible.
For each of your posters, answer the following questions:
•

What is the message conveyed?

•

What action is the viewer called to take?

•

Which of these propaganda techniques are used: appealing to fear, flag waving
(patriotism), jumping on the bandwagon?

© 2014, Federal Reserve Bank of St. Louis. Permission is granted to reprint or photocopy this lesson in its entirety for educational
purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education.

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 4: Conservation of Resources (page 2 of 4)

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purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education.

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 4: Conservation of Resources (page 3 of 4)

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purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education.

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 4: Conservation of Resources (page 4 of 4)

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 5: Guns or Butter Production (page 1 of 2)

Guns = 1 Unit

Sherman tank

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 5: Guns or Butter Production (page 2 of 2)

Butter = 1 Unit

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 6: Production Possibilities
Production Possibilities Table 1
Production

A

B

C

D

E

F

G

Butter
Guns

8

Quantity of Butter Produced

7
6
5
4
3
2
1

1

2

4
3
5
6
Quantity of Guns Produced

7

8

Production Possibilities Table 2
Production

A

B

C

D

E

F

G

H

I

Butter
Guns

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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Handout 7: U.S. Spending on Guns versus Butter: 1929-1950
1

2

3

4

5

Year
1929
1939
1940
1941
1942
1943
1944
1945
1946

Total gross
national
production
(GNP)*
$709.6
$716.6
$772.9
$909.4
$1,080.3
$1,276.2
$1,380.6
$1,354.8
$1,096.9

Spending
on guns†
$18.3
$53.8
$63.6
$153.0
$407.1
$638.1
$722.5
$634.0
$159.3

Guns as a
% of GNP
2.58
7.51
8.23
16.82
37.68
50.00
52.33
46.80
14.52

Spending
on butter ‡
$691.3
$662.8
$709.3
$756.4
$673.2
$638.1
$658.1
$720.8
$937.6

Butter as a
% of GNP
97.42
92.49
91.77
83.18
62.32
50.00
47.67
53.20
85.48

1950

$1,203.7

$116.7

9.70

$1,087.0

90.30

NOTE: *In billions of 1982 dollars. †Guns represent total federal purchases of goods and services. ‡Butter represents total civilian
purchases of goods and services.
SOURCE: Walton, Gary M. and Rockoff, Hugh. History of the American Economy. Eleventh Edition. Mason, OH: South-western
Cengage Learning, 2010.

1,100
1,000

Quantity of Butter Produced

900
800
700
600
500
400
300
200
100

100

200

300

400

500

600

700

800

Quantity of Guns Produced
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Lesson Plan

The Arsenal of Democracy: The United States in World War II

Standards and Benchmarks
National Standards in Economics
Standard 1: Scarcity. Productive resources are limited. Therefore, people cannot have all the
goods and services they want; as a result, they must choose some things and give up others.
•

Benchmark 1, Grade 8: Scarcity is the condition of not being able to have all of
the goods and services that one wants. It exists because human wants for goods
and services exceed the quantity of goods and services that can be produced using
all available resources. Scarcity is experienced by individuals, governments, and
societies.

•

Benchmark 1, Grade 12: Choices made by individuals, firms, or government
officials are constrained by the resources to which they have access.

Common Core State Standards: Literacy in History/Social Studies and
Technical Subjects, Grades 6-12
English Language Arts Standards, History/Social Studies
•

Craft and Structure, Grades 9-10
CCSS.ELS-Literacy.RH.9-10.4: Determine the meaning of words and phrases as
they are used in a text, including vocabulary describing political, social, or
economic aspects of history/social science.
CCSS.ELS-Literacy.RH.9-10.7: Integrate quantitative or technical analysis (e.g.,
charts, research data) with qualitative analysis in print or digital text.

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Key Ideas and Details, Grades 11-12
CCSS.ELS-Literacy.RH.11-12.1: Cite specific textual evidence to support analysis
of primary and secondary sources, connecting insights gained from specific
details to an understanding of the text as a whole.
CCSS.ELS-Literacy.RH.11-12.2: Determine the central ideas or information of a
primary or secondary source; provide an accurate summary that makes clear the
relationships among the key details and ideas.

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Range of Reading and Level of Text Complexity, Grades 11-12
CCSS.ELS-Literacy.RH.11-12.10: By the end of grade 12, read and comprehend
history/social studies texts in the grades 11–CCR text complexity band independently and proficiently.

United States History Content Standards for Grades 5-12
Era 8: The Great Depression and World War II (1929-1945)
Standard 3: The cause and course of World War II, the character of the war at home and
abroad, and its reshaping of the U.S. role in world affairs.

© 2014, Federal Reserve Bank of St. Louis. Permission is granted to reprint or photocopy this lesson in its entirety for educational
purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education.

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Lesson Plan
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The Arsenal of Democracy: The United States in World War II

Standard 3C: The student understands the effects of World War II at home.
Grade level 5-12: Explain how the United States mobilized its economic and
military resources during World War II.
Grade level 7-12: Analyze the effects of World War II on gender roles and the
American family.

© 2014, Federal Reserve Bank of St. Louis. Permission is granted to reprint or photocopy this lesson in its entirety for educational
purposes, provided the user credits the Federal Reserve Bank of St. Louis, www.stlouisfed.org/education.

37


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