Question

Reckless printing of German mark resulted in the falling of the value
of the currency , therefore vast amounts had to be used even for small

payments. This resulted in _________________.​

Answer 1

Answer:

Let’s start different. Let’s say you have 10 chocolates (your wage) and you need to exchange them to get 1 cake ( the desired basket of goods and services). So we have set a price. 10 chocolates = 1 cake, 1 chocolate = 1/10 cakes. When you get more 20 chocolates you would think you can buy 2 cakes, however cakes take time to make and there is a limited supply. So the seller in order to control the demand for his good raises the price to 20 chocolates = 1 cake, 1 chocolate = 1/20 cakes. Therefore you can buy less cake for each chocolate. Now factor in that everyone has got 20 chocolates and they all want cake, the price for cake would rise enormously. As the price rises, people demand higher wages ( chocolates) from their employers. With higher wages, the price moves in the same direction, i.e, up.

To put simply, printing too much money means there is more money going after similar goods and services. The per unit value of money falls and the price rises.

The sellers are forced to increase prices because they have to pay higher wages to their employees because of higher prices. And the cycle continues.

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What is the best way to expand your professional network?

Vladimir Novakovski, Cofounder and CEO of Lunchclub

Updated October 12, 2020

With Lunchclub, we have created a way to network over video both locally and globally. Previously, I have built networks over the years in academia, the hedge fund space, and Silicon Valley and can share some of the thinking that went into how networks expand.

Explanation:

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