Paper Trap Slides
Paper Trap Slides
Understanding Inflation and Hyperinflation in the Weimar Republic
High School Economics Case Study: 1923
Warm Up Analysis
"The Wallpaper Photo"
(Video Timestamp 7:11)
A man is applying banknotes to his wall as if they were cheap decorative paper.
Observe and Guess
Look at the image in the video. Why is this man using money as wallpaper?
Initial Definition
In your own words, what does it mean when "prices go up"?
Key Economic Terms
Inflation
A general increase in prices and a fall in the purchasing value of money.
The $1.00 pizza slice becomes $1.50 over a year.
Hyperinflation
Extremely rapid, out-of-control inflation where prices double or triple within weeks or days.
The $1.00 slice is $2.00 today, $4.00 tomorrow, and $8.00 by Friday.
Video: Challenges to Democracy
Embedded media
Watch For:
- How did Germany pay for the war?
- Printing vs. Taxing
- Social effects of the crisis
Policy Comparison
Britain & France
Taxation
Raised wartime taxes to pay for soldiers and munitions. This takes existing money out of the economy to pay the government's bills.
Germany
The Printing Press
Printed new currency to pay reparations. This increases the total supply of money, making each individual mark less valuable.
The Spiral Effect
When people know their money will be worth less tomorrow, they spend it as fast as possible today.
Higher Money Supply
Higher Velocity
Result: Hyperinflation Meltdown
Exit Ticket
"Why did printing money to pay reparations fail?"
Be sure to use the word value in your explanation.
Mark Meltdown Worksheet
Mark Meltdown Worksheet
Subject: HS Economics
Topic: Weimar Hyperinflation
Student Name
Date
Part 1: Video Analysis
1. Define Inflation according to the video:
2. What makes inflation "Hyperinflation"?
Policy Contrast
| Country | Economic Strategy |
|---|
| Britain & France | Paid for the war by... |
| |
| |
| Germany | Paid for the war by... |
| |
|
Part 2: The Meltdown of 1923
| Month (1923) | Marks per $1 USD |
|---|
| January | 17,972 |
| July | 353,412 |
| August | 4,620,455 |
| September | 98,860,000 |
| October | 25,260,000,000 |
| November | 4,200,000,000,000 |
Note: Look closely at the number of zeros. By November 1923, it took 4.2 trillion marks to equal just one US dollar.
Sketch the Inflation Curve (Value of Mark Collapse)
Value of Mark
Jan ——— Nov (1923)
Instruction: Plot the general direction of the curve based on the table. Is it a straight line or a "hockey stick"?
Part 3: Synthesis Questions
3. The Velocity of Money:
As the value of the Mark dropped, why did people spend their money faster? How did this create a "vicious cycle"?
4. Social Impact:
Imagine you are a retiree who saved 50,000 Marks for 20 years. What happens to your life savings in November 1923?
"Hyperinflation is not just an economic event; it is a psychological one."
Mark Meltdown Exit Ticket
Exit Ticket
Meltdown of the Mark
Student Name
Why did printing money to pay reparations fail?
Explain the connection between money supply, prices, and the value of currency.
Economic Analysis Case Study 1923 Weimar Germany
Exit Ticket
Meltdown of the Mark
Student Name
Why did printing money to pay reparations fail?
Explain the connection between money supply, prices, and the value of currency.
Economic Analysis Case Study 1923 Weimar Germany
