To fund budget shortfalls, the government of Sineria, a country in South Asia, has started printing more money. Consequently, the supply of money has increased in the economy without corresponding increases in output quantity. This, in turn, has caused prices to rise as more money chases the same number of goods and services. This scenario most likely exemplifies _____.

Question

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This scenario exemplifies hyperinflation, which occurs when there is a rapid and excessive increase in the amount of money in an economy, leading to a sharp rise in prices. This often happens when a government prints money to pay for its spending, without a corresponding increase in the supply of goods and services.

To Fund Budget Shortfalls, the Government of Sineria, a Country