When hyperinflation occurs:
A) people try to spend their wages as soon as they receive them.
B) people save more of their income, which therefore decreases investment.
C) nominal wages remain constant, but prices rise, leading to an increase in purchasing power.
D) people cut back on consumption and increase saving.

Question

Quizplus · Accepted Answer

When hyperinflation occurs, people try to spend their wages as soon as they receive them because the value of money decreases rapidly, and they fear that if they do not spend it immediately, it will be worth even less in the future.

When Hyperinflation Occurs