What is hyperinflation and what are its effects?
What will be an ideal response?
Hyperinflation is a very rapid inflation that has extremely negative effects on real output and employment. Under hyperinflation conditions, people anticipate price increases and spend their income immediately to obtain goods before prices rise again. Trying to beat the price increases wastes time and destroys confidence in the economy. Income is arbitrarily redistributed. Planning, investing, and decision-making become difficult, if not impossible, and the pace of economic activity becomes uncertain and declines. Speculative activity is encouraged. The end result from a period of hyperinflation is economic collapse such as that experienced in Germany during the 1920.
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When each member of a group has transitive preferences but the collective preferences of the group are not transitive, this is an anomaly known as the ________
Fill in the blank(s) with correct word
Junk bonds are securities with
a. low risk and low yield. b. high risk and high yield. c. low risk and high yield. d. high risk and low yield.