Analysis of episodes of hyperinflation indicate that the rapid money growth leading to the inflation is the result of
A)governments financing massive budget deficits by printing money.
B)central banks' attempts to peg interest rates.
C)central banks' attempts to peg exchange rates.
D)increases in taxes.

Question

Quizplus · Accepted Answer

Episodes of hyperinflation are usually the result of the excessive increase in the money supply, often caused by governments financing budget deficits by printing money. This creates an oversupply of money, which leads to a decrease in the value of the currency and a corresponding increase in prices. Therefore, choice A is the best option.

Analysis of Episodes of Hyperinflation Indicate That the Rapid Money