Money supply growth that causes hyperinflation is in turn, caused by:
A) large budget deficits.
B) a reduction in the velocity of money.
C) an increase in oil prices.
D) sustained increases in government spending and taxes.

Question

Quizplus · Accepted Answer

Hyperinflation is caused by excess money supply growth, which is often fueled by large budget deficits as governments try to cover their expenses by printing more money, leading to an inflationary spiral. The other options, such as a reduction in the velocity of money, an increase in oil prices, and sustained increases in government spending and taxes, can all affect inflation to some degree, but they are not the primary causes of hyperinflation.

Money Supply Growth That Causes Hyperinflation Is in Turn, Caused