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24 December, 08:39

Inthe 1920's, the value of the German mark fell dramatically. in June 1922, a U. S. dollar could buy 320 marks; by December of that same year, it could buy 8,000 marks.

What is the economic term for a very high rate of inflation such as the one experienced by Germany in the 1920's?

A. Inflation

B. Disinflation

C. Hyperinflation

D. Deflation

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Answers (1)
  1. 24 December, 09:31
    0
    The answer is C: Hyperinflation

    Explanation:

    Hyperinflation is high and accelerating form of inflation. It results in quick decline of the local currency's real value. It also leads to increased prices of all goods and consumables

    From the data,

    In June 1922, 1 german Mark was equal to 0.003125 USD (1/320)

    Whereas in December, 1922, the same german Mark was equal to 0.000125 USD. (1/8000)
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