what is hyper inflation? state the
factors responsible for it
Answers
Answer:
Hyperinflation has two main causes: an increase in the money supply and demand-pull inflation. The former happens when a country's government begins printing money to pay for its spending. As it increases the money supply, prices rise as in regular inflation.
Explanation:
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Answer:
Hyperinflation is a situation when prices of goods rise phenomenally high.
This situation occurred in Germany after the First World War.
Germany had fought the war largely on loans. So it had to pay the reparations in gold. This depleted the gold reserves or Germany. And when Germany refused to pay, France occupied Ruhr, a resource rich land, to claim its coal.
Germany began to print paper currency recklessly. Because of too much paper currency in circulation, the value of the German mark fell. The value of German mark fell from some thousands to trillions. Due to all this, the prices of goods soared.
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