Jacob the Liar (1974) on Netflix

In 1944, in Poland, the Jew Jakob Heym breaks the curfew in the ghetto where he lives and a guard in the lookout sends him to see the chief of the guards. Jakob is released by the German, but overhears a radio broadcasting that the Russians are advancing towards their town. On the next morning, his comrade Mischa wants to risk his life to steal a couple of potatoes in a German store, Jakob tells that the Russians are coming and confides that he has a radio. Soon the secret Jakob has told to Mischa is known by the residents of the ghetto and Jakob notes that his lies give hope to the Jews, reducing the number of suicide. Meanwhile his niece Lina, who is sick, gets better with Jakob stories and believes that clouds are made of cotton balls.