In less than two years in the early 1920s,the cost of a German newspaper rose from 0.30 marks to 70,000,000 marks.This is a spectacular example of
A)market power caused by a change in the country's standard of living.
B)market power caused by a single firm controlling the newspaper production.
C)inflation caused by increased productivity in the economy.
D)inflation caused by an increase in the quantity of money in the economy.

Question

Quizplus · Accepted Answer

The drastic increase in the cost of the German newspaper in less than two years is a clear example of inflation caused by an increase in the quantity of money in the economy. With the aftermath of World I, the German government resorted to printing excessive amounts of money, leading to the devaluation of their currency and an increase in the general price level of goods and services, including the cost of producing newspapers. It was not caused by market power or changes in the country's standard of living.

In Less Than Two Years in the Early 1920s,the Cost