What is meaning of hyper inflation
Dear Student,
a. Hyper inflation refers to a situation when there is a price rise beyond a control that it severely impacts the local currency of a country and depreciates its value.
b. Germany experienced hyper inflation, after the First World war, with the signing of the treaty of Versailles.
c. Germany was financially crippled after the first World War, little could Weimer Republic do to recover its economy, Germany under the reparation clause had to part with much of its gold reserves and later decided to print and issue more currency to pay for war damage and to exchange it.
d. Germans in order to deal with the crisis, recklessly printed more currency, they flooded the market with German mark that is increased its supply in the market therefore its value decreased.
e. Once the value of the currency decreased, which implied you pay more to buy goods. The prices of all commodities thus increased which led to inflation.
f. It was only later America by virtue of Dawes plan tried to ease financial burden of the Germans.
Regards
a. Hyper inflation refers to a situation when there is a price rise beyond a control that it severely impacts the local currency of a country and depreciates its value.
b. Germany experienced hyper inflation, after the First World war, with the signing of the treaty of Versailles.
c. Germany was financially crippled after the first World War, little could Weimer Republic do to recover its economy, Germany under the reparation clause had to part with much of its gold reserves and later decided to print and issue more currency to pay for war damage and to exchange it.
d. Germans in order to deal with the crisis, recklessly printed more currency, they flooded the market with German mark that is increased its supply in the market therefore its value decreased.
e. Once the value of the currency decreased, which implied you pay more to buy goods. The prices of all commodities thus increased which led to inflation.
f. It was only later America by virtue of Dawes plan tried to ease financial burden of the Germans.
Regards