In 2008,Zimbabwe ran out of locally produced Coca Cola and local Coke bottlers were not able to import the concentrated syrup needed to make Coke from the United States because they could not obtain U.S.dollars.A small amount of Coke was imported from South Africa,but a single bottle sold for around 15 billion Zimbabwean dollars.Zimbabwe was experiencing rapid increases in the price level,which is known as
A)stagflation.
B)deflation.
C)inflation.
D)hyperinflation.

Question

Quizplus · Accepted Answer

The rapid increases in price levels that Zimbabwe was experiencing are characteristic of hyperinflation - a situation where prices increase extremely quickly, often doubling or tripling in a matter of weeks or months. This is often caused by a rapid increase in the money supply, which can be caused by factors such as excessive government spending or an extremely loose monetary policy. In Zimbabwe's case, the government had been printing money to finance its expenditures, which led to a hyperinflationary spiral that ultimately rendered its currency virtually worthless.

In 2008,Zimbabwe Ran Out of Locally Produced Coca Cola and Local