Over the past 8 years, the Zimbabwean currency has lost 90% of its value. This is an example of the _________ effects of inflation on a local economy.
A)Retroactive
B)Sliding
C)Positive
D)Negative

Question

Quizplus · Accepted Answer

Loss of currency value is an example of the negative effects of inflation on a local economy.
Key Takeaway: When a currency loses its value, it diminishes purchasing power and has adverse effects on local economies. High inflation rates can lead to a local currency losing a great deal of its value if not kept in check. For example, a country with a collapsed agricultural output such as Zimbabwe will find its local currency devalued so much that it is rendered worthless for individuals to purchase goods and services.

Over the Past 8 Years, the Zimbabwean Currency Has Lost