How did the demobilization that occurred following world war i affect the economy of the united states?

The costs of everything were rapidly increased and there was a lot of unemployment. Suddenly a bunch of new workers joined the market consisting of both those who served in the military and those who stayed at home and the economy started becoming really bad. This is why Harding won presidency since he devised a way to solve this.

During the demobilization phase, the rates of food prices and other commodities went up to a very high level and thereby it caused inflation in the US economy. As a result of inflation, everything in the market becomes expensive and hence the cost of living for general public and workers went up and they find it difficult to meet their basic needs.