what created inflation during the war (world war 1) how was money raied to pay for the efforts?

During World War I, several factors contributed to the creation of inflation. The main causes were increased government spending, high demand for goods and services, disruptions in trade, and the expansion of the money supply. To understand how money was raised to fund the war effort, we need to examine some key methods used by countries during that time:

1. Government borrowing: Governments raised significant amounts of money by issuing bonds and borrowing from their citizens, as well as international lenders. These bonds were essentially IOUs promising to pay back the borrowed amount with interest in the future.

2. Increased taxation: Governments imposed higher taxes on individuals and businesses to generate additional revenue. This method helped finance the war effort directly by extracting money from the economy.

3. Printing money: Countries resorted to printing more money to cover their expenses. As a result, the money supply increased without a corresponding increase in the production of goods and services. This excess currency led to inflation as the value of money declined.

4. International loans: Some countries sought financial aid from other nations to support their war efforts. They borrowed money from countries that had more stable economies and were willing to provide financial assistance.

It's important to note that these methods can have long-term consequences, including inflation and increased public debt. The combination of increased government spending and the expanded money supply typically played a significant role in driving inflation during times of war.