Hyperinflation is
A) inflation caused by negative growth in the quantity of money.
B) inflation at a rate that exceeds 50 percent a month.
C) inflation caused by excessive growth in the demand for money.
D) inflation at a rate that exceeds 5 percent a month.
E) only theoretical and has never occurred in the real world.

Question

Quizplus · Accepted Answer

Hyperinflation is a term used to describe extremely high and rapid rates of inflation. Generally, inflation rates exceeding 50 percent per month are considered hyperinflation. Therefore, option B is the correct answer. Option A is incorrect because negative growth in the quantity of money is deflation, not inflation. Option C is incorrect because excessive growth in the demand for money results in an increase in the value of money and a decrease in the price level. Option D is incorrect because a monthly inflation rate of 5 percent is high but not hyperinflation level. Option E is also incorrect because hyperinflation has occurred several times throughout history, notably in Germany during the 1920s and in Zimbabwe in the 2000s.

Hyperinflation Is