Question

Which of the following best explains the economic depression Germany experienced following the First World War?

A. The number of labor union members increased across the country.
B. Banks offered low-interest loans to help rebuild homes.
C. The government implemented regulations to help improve worker safety.
D. Mandatory reparations caused massive inflation in the country.

Answer 1

The economic depression in Germany following WWI was primarily caused by mandatory reparations, which led to massive inflation and a decrease in the value of the currency.

Step-by-step explanation:

The economic depression that Germany experienced following the First World War can be primarily attributed to the mandatory reparations that the country was required to pay. Under the terms of the Versailles Treaty, Germany had to pay reparations to the Allies in the form of gold, coal, and timber. However, Germany was unable to keep up with the payments, which led to massive inflation in the country. In an attempt to fund the payments, the German government printed more paper money, causing the value of the currency to decrease significantly.