history key topic one

inflation

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inflation

these shortages meant that the price of things went up. - inflation. people had to pay more money for things they needed. the government need money to pay their debts but unemployment and failing factories meant they recieved less money from taxes. during 1919-23 government income was only a quarter of what was required so the government made more money. in 1923 the government had 300 paper mills and 2000 printing shops just to print more money.

this made it easier initially for the government to pay reparations but it made inflation even worse. it was a vicious circle - the more prices rose, the more money was printed and this made prices rise again. by 1923 prices reached spectacular heights. a loaf of bread cost 1 mark in 1919 by 1922 it cost 200 marks. by november 1923 it cost 200,000 billion marks -this is called hyperinflation.

  • everyone suffered from shortages as the german marks became worthless.
  • everyone found it difficult to buy what they needed - people had to carry bundles of money in baskets.
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