The number of categorical grants in the united states increased dramatically during the

The answer is 1960

After the Great Depression, hundreds of factories closed down and millions of people lost their jobs. This led to complete communities being uprooted as unemployment reached high levels.

Local governments were shattered due to a lack of funds and huge debts. 

The New Deal Policy helped to provide grants to local governments and increase by 10 times in as little as two years.

The grant kept on growing between World War II and by the 1960s as at its highest.

The right answer is during the 1960's.

The Categorical grants, are grants issued by the United States Congress for pre-established purposes. Its objective is to be used in state and local expenditures such as infrastructure development or to strengthen education. During the 1960s, categorical grants in the United States increased dramatically from which most were project grants. The aims of the categorical grants were to make taxpayers out of tax eaters and to redistribute wealth. Many perceive this time as the rise of the welfare state.
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