Hyperinflation Crisis

Question 1

When was the Hyperinflation Crisis?

Answer 1

1923

Question 2

What is Hyperinflation?

Answer 2

When prices spiral upwards out of control and money becomes worthless

Question 3

Causes of Hyperinflation

Answer 3

Poor state of German economy due to WWI - Too much money printed during war and not enough goods produced
Turned into hyperinflation when Gov. printed more to pa the strike workers on Passive Resistance in the Ruhr

Question 4

Impact of Hyperinflation - losses

Answer 4

Value of currency went down
Bartered in shops to trade with others
People with jobs affected
People with savings - extreme losses as middle classed and often relied on the savings
In most cases, life savings not enough to pay to buy food
Elderly on pensions found they could not buy what they needed

Question 5

Impact of Hyperinflation - Gains

Answer 5

Those in debt or those who borrowed money gained

Farmers became rich as could sell/trade produce

Question 6

Impact of Hyperinflation - Problems

Answer 6

Prices changed and inc. drastically/quickly
People hated the French
Gov. could not help
Crime inc.
Businesses failed and closed down

Question 7

Solution to Hyperinflation

Answer 7

Formation of a new currency, the Reichsmark

Question 8

Who created the Reichsmark

Answer 8

Stresemann (1923)

Became chancellor and stopped printing the old currency - the Rentenmark

Question 9

How much was the Reichsmark worth?

Answer 9

1 trillion Rentenmark note for 1 Reichsmark

Question 10

When was the Rentenmark replaced?

Answer 10

August 1924

A stable currency was in use for the next 25 years

Question 11

What was the Dawes plan?

Answer 11

Aug. 1924
Ger. negotiated the Dawes plan which provided loans from America to help rebuild the economy and help the reparation bill