HistoryWhich of the following best describes Hyperinflation?

Which of the following best describes Hyperinflation?


  1. A
    When prices fall phenomenally low
  2. B
    High debts
  3. C
    When prices rise phenomenally high
  4. D
    None of the above  

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    Solution:

    Hyperinflation describes when prices rise phenomenally high.
    Hyperinflation is the rapid and excessive increase in prices in an economy. Due to the effects of the war and the growing national debt, Germany already had significant inflation levels. "Passive resistance" badly harmed the economy by reducing industrial output while employees were on strike. The government prints additional money to pay the striking workers. When more money was issued while prices increased, hyperinflation was the result. Due to the unchecked price inflation, a loaf of bread that cost 250 marks in January 1923 cost 200,000 million marks in November 1923.
     
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