Answer:
(i) Germany had fought the war largely on
loans and had to pay war reparation in gold.
(ii) This depleted gold reserves at a time when resources
were scarce.
(iii)
In 1932, Germany refused to pay, and the French occupied its leading industrial
area 'Ruhr', to claim their coal.
(iv) Germany retaliated with passive resistance and printed
paper currency wrecklessly.
(v) With too much printed money in circulation, the value
of the German mark fell.
(vi) As the value of the mark collapsed, prices of goods
soared.
(vii)
The image of the Germany carrying cartloads of currency notes to buy a loaf of
bread was widely publicised.
(viii) This crisis came to be known as hyper-inflation, a
situation when prices rise phenomenally high.
(ix)
Eventually, the Americans intervened and bailed Germany out of the crisis by
introducing 'The Dawes Plan' which reworked the terms of separation to ease the
financial burden on Germany.
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