In high inflation countries, inflation rates can exceed the rate of growth of money because:

Question

Quizplus · Accepted Answer

All the given options are correct. High inflation increases the velocity of money because people spend money faster to avoid losing its value, and high rates of inflation increase the opportunity cost of holding money because money loses value quickly with inflation. As a result, inflation rates in high inflation countries can exceed the rate of growth of money.

In High Inflation Countries, Inflation Rates Can Exceed the Rate