The main reason that hyperinflation renders a currency worthless is that ________
A) the government cannot print money fast enough to keep up with the rising prices
B) laws against raising prices are easily evaded
C) reducing government expenditures is politically unpopular
D) the government's "official" inflation rate is always a gross understatement
E) as soon as inflation seems out of control, everyone knows that the currency will soon lose whatever value it has today
E
You might also like to view...
In the simple deposit expansion model, a decline in checkable deposits of $1,000 when the required reserve ratio is equal to 10 percent implies that the Fed
A) sold $1,000 in government bonds. B) sold $100 in government bonds. C) purchased $1,000 in government bonds. D) purchased $100 in government bonds.
Suppose labor productivity differences are the only determinants of comparative advantage, and Brazil and Chile both produce only coffee and sugar. In Chile, either 5 units of coffee or 2 units of sugar can be produced in one day. In Brazil, a day of labor produces either 2 units of coffee or 1 unit of sugar. Which of the following statements is true?
a. Brazil has an absolute advantage in producing only coffee. b. Brazil has an absolute advantage in producing only sugar. c. Chile has an absolute advantage in the production of both coffee and sugar. d. Chile has an absolute advantage in producing only coffee. e. Brazil has an absolute advantage in the production of both coffee and sugar.