Overview

Over the last century, the American economy experienced enormous transformation. War, depression, reform, and globalization all played defining roles. From the New Deal to the rise of service industries and the digital economy, this period illustrates shifting federal priorities, labor trends, and economic inequality.

Key Themes and Events

• World War I and Industrial Mobilization: Federal control of railroads and wartime production signaled the increasing role of government in directing the economy.
• The Great Depression and New Deal: The stock market crash of 1929 led to massive unemployment. FDR’s New Deal programs (e.g., WPA, Social Security, SEC) redefined the federal role in economic recovery and regulation.
• Post–World War II Boom: Between 1945 and 1973, the U.S. experienced sustained economic growth, suburbanization, consumerism, and the rise of the middle class, supported by GI Bill benefits and highway expansion.
• Deindustrialization and Globalization: From the 1970s onward, U.S. manufacturing declined as companies outsourced production. Service and tech sectors expanded, but wage inequality grew.
• Federal Economic Policy Shifts: Conservative economic policies under Reagan emphasized deregulation, tax cuts, and reduced social spending. Later responses to crises (e.g., 2008 financial crash and COVID-19) included massive stimulus packages.
• Labor and Workforce Transformation: Union membership peaked mid-century but declined after the 1980s. The modern workforce includes gig economy jobs, remote work, and expanding roles for women and minorities.

Quick Tip

Be familiar with the causes and effects of the Great Depression and the key components of the New Deal. Understand postwar growth, economic crises, and federal responses to recession. CLEP questions may test your ability to link events to policy shifts.