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Do Now:
 Out of the many problems in the documents from
yesterday, which one do you think was the worst?
Why?
Key Words:
 inflation: a rise in prices and the devaluation of
currency
 depression: a sustained, long term decline in
economic productivity and activity
I. Hyperinflation and the 1923 Crisis
 In 1923, Germany defaulted on its reparations




payments
In retaliation, France invaded the Ruhr, an
important steel making region.
Steelworkers went on strike, and the
government started printing money in order
to support them during the strike.
 With more money around, the value of money
began to decline, but the Weimar government
kept printing more money.
Soon, hyperinflation took hold, and prices of
things were doubling in just a few hours time.
THE LAW OF SUPPLY AND DEMAND
PRICE /
VALUE
Supply (how much of
it there is)
Demand (value, or
the price people
are willing to pay)
0
QUANTITY
(AMOUNT)
II. Impact of the 1929 Stock Market
Crash
 In 1929, the stock market crashed and a worldwide






depression followed.
One cause was overproduction after WWI, which caused
the price of goods to fall.
Another cause was selling stocks on margin (credit).
When businesses started to lose money because of
overproduction, they demanded people paid the amount
they owed on their stocks and demanded European
countries pay back their loans.
When people didn't pay up, businesses had to cut costs by
producing less, firing people, sometimes going bankrupt.
Germany heavily relied on loans and investment from
America, and when the market crashed, all that stopped.
In Germany, ~8% of the population was unemployed before
the crash, by 1932, it was ~30%.
NEED AT
LEAST 10
DETAILS
FOR A “B”
OR HIGHER
Too many political parties, none get
majority