what is hyperinflation?
Answers
Hyperinflation
Explanation:
- Hyperinflation is known for a situation when the value of the currency gets decreased.
- The prices of goods get higher and its demands in the market.
- Hyperinflation leads to inflation due to the increasing money supply because of its increasing prints from the government to cover budget deficits.
Learn More:
What is hyperinflation ? mention the factor responsible for hyperinflation
brainly.in/question/30437620
Hyperinflation is a term to describe rapid, excessive, and out-of-control general price increases in an economy. While inflation is a measure of the pace of rising prices for goods and services, hyperinflation is rapidly rising inflation, typically measuring more than 50% per month.
Hyperinflation is a situation when prices rise phenomenally high. This situation occurred in Germany in 1923 due to several reasons:
(i) Germany had fought the First World War largely on loans and had to pay the war compensation in gold. This depleted gold reserves at a time resources were scarce.
(ii) When Germany refused to pay the war compensation, France occupied its leading industrial area, Ruhr, to claim their coal.
(iii) Germany retaliated with passive resistance and printed paper currency recklessly. With too much printed money in circulation, the value of the German Mark fell. As a result, prices of goods soared. The image of Germans carrying cartloads of currency notes to buy a loaf of bread was widely publicised. This crisis came to be known as hyperinflation.
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