Question

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

Answer 1

Answer:

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)