Final answer:
The German government increased the money supply in the early 1920s to pay striking workers amidst the French occupation of the Ruhr Valley. This led to hyperinflation, eroding the middle-class savings and contributing to the social conditions that facilitated Adolf Hitler's rise to power.
Step-by-step explanation:
One major factor that led to the German government dramatically increasing the supply of the nation's currency in the early 1920s, leading to hyperinflation, was the need to pay striking workers during the occupation of the Ruhr Valley. After World War I, Germany was financially strained and unable to meet its reparations payments. In response to France seizing the Ruhr Valley, an industrial and mineral-rich region, Germany began printing more money to support striking workers and pay its bills, thus dramatically devaluing the Mark. This action helped set off a cycle of hyperinflation that resulted in rapid devaluation of the currency, economic chaos, and social unrest.
By the end of 1923, the situation had reached a crisis point where an American dollar was equivalent to nearly 10,000,000,000 marks. Middle-class savings were wiped out as the value of the currency plummeted, leading to a loss of confidence in the Weimar government and setting the stage for political extremism. This economic and social turmoil was exploited by Adolf Hitler, who rose to power by promising stability and a return to national pride.