Following the Great War, America faced many challenges, one of which was rapid inflation. What factors contributed to this development? Responses Workers were now able to strike, and did, creating a labor shortage which reduced productive capacity. Workers were now able to strike, and did, creating a labor shortage which reduced productive capacity. As the flu spread, people bought many goods in bulk thus creating an increase in demand and driving up prices. As the flu spread, people bought many goods in bulk thus creating an increase in demand and driving up prices. There was a shortage of domestic goods, as reversion to the production of peacetime goods was slow. There was a shortage of domestic goods, as reversion to the production of peacetime goods was slow. People were hesitant to buy new goods due to the unstable economic situation. People were hesitant to buy new goods due to the unstable economic situation