Inflation is a Latin word that means 'to blow up or swell'. This is exactly what happens in inflation. The amount of money in circulation increases. As a result,money loses its value and purchasing power, because the value of goods increases more as compared to teat of money. In 1923, Germany experienced one of the most severe inflations of all. During the First World War and thereafter a lot of money was printed, but there were no groceries and the other essential goods. The prices increased rapidly, for one US Dollar (today around 80 Eurocent) one had to give around 4 billion mark-that is a 4 followed by 12 zeroes!
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