In Germany in January 1921, a daily newspaper cost 0.30 marks. Less than 2 years later, in November 1922, the same newspaper cost 70,000,000 marks. All other prices in the economic rose by similar amounts. This episode is one of history,s most spectacular examples of inflation, an increase in the overall level of prices in the economy. Although the United States has never experienced even close to that in Germany in the 1920s, inflation has at times been an economic problem. During the 1970s, for instance, tree overall “level of prices more than doubled, and President Gerald Ford called inflation public enemy nunber one. By contrast, inflation in the 1990s was about 3 percent per year at this rate, it would take more than 20 years for prices to double. Because high inflation imposes various costs on, society, keeping inflation at a low level is goal of economic policymakers around the world. What causes inflation? In almost all cases of large or persistent infl...