Describe the effect of hyperinflation

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Describe the effects of hyperinflation (6 marks)

Target: In this essay, I am aiming to prioritise my reasons, and points; link back to the question; and add additional information as an extension.

        The main effect of hyperinflation is that consumers struggle in buying what they need. The prices of goods rise continuously, so people do not have enough money to buy the items they would have been able to afford previously. This results in debt, which would be hard to pay off especially if prices continue to rise, or going without, which could cause health issues. There is also the temptation of theft; in desperation some people might be drawn to thievery to support their family.

Even for those few people whose salary kept pace with inflation, it was hard to buy the goods. They needed so much money to buy what they needed that they would physically struggle to transport the money to the shop. In some cases of hyperinflation, people had to transport money in wheelbarrows because they needed so many notes for even small items. An example of this was in Germany 1923, where a single loaf of bread eventually cost 200 billion marks.

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Another result of prices rising all the time was that workers had to get paid twice a day to rush out and buy their goods before prices rose even more. Furthermore, this meant that wages never caught up with the ever-diminishing value of money, and were insufficient to cover the costs.

Another important effect of hyperinflation is that people in general struggled with growing shortages. When small items were equal to thousands, or even millions, of notes, foreign suppliers started refusing to accept the hyper-inflated currency. This meant that imports dried up and shortages of food and other goods got ...

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