The reason behind the inflation that occurred in both the north and the south during the civil war was the limited supply of goods, which caused prices to rise.
Inflation means a general rise in the price of goods and services. When price levels rise, a currency becomes cheap, which means the value of a currency will go down, making things more costly or the value of a currency reduced.
This means now each unit of currency buys fewer goods and services. Inflation can occur due to various phenomena, like an increase in production costs, high demand, and less supply. In a period of inflation, consumers are willing to pay more for products.
The "civil" in "civil war" basically refers to citizens, thus "civil war" is the war between citizens of the same country. In the past, there were various examples of civil war, but the American Civil War is one of the most famous civil wars. It happened in 1861.
It is also called war between states and help to formed the confederate states of America. This civil war has cost many things. So many people died, feeding, supplying and paying the armies and navies was, by far, largest expenditure of the war routes were closed, which hampered the supply chain and led to inflation, which affected the condition more badly.
In financial loss money was not alone the destruction of property and the loss of labour force was also there.
The reason behind the inflation in South and North America is the limited supply of goods. The south had faced far more difficulty due to the navel blockade and the printing of money to finance the war effort, which led to more severe inflation.
Hence, option D is correct.
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