Which of the following contributed to the emergence of hyperinflation in Germany in the early 1920s?
A) Payment of massive war reparations required by the Versailles Peace Treaty
B) Huge budget deficits financed by printing paper money
C) Decreased desire to hold money on the part of the German people.
D) All of the above.

Question

Quizplus · Accepted Answer

All three factors contributed to the emergence of hyperinflation in Germany in the early 1920s. The massive war reparations required by the Versailles Peace Treaty put a strain on Germany's economy and finances. The government financed huge budget deficits by printing paper money, which led to a devaluation of the currency and rising prices. The German people also lost confidence in their currency, resulting in a decreased desire to hold money, which further fueled hyperinflation.

Which of the Following Contributed to the Emergence of Hyperinflation