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During Periods of Hyperinflation,money Does Not Hold Its Value Long

Question 2

Multiple Choice

During periods of hyperinflation,money does not hold its value long enough to make everyday market purchases; therefore,people hold as little as possible for as short a time as possible.This description implies that the


A) Transactions demand for money has decreased.
B) Precautionary demand for money has increased.
C) Speculative demand for money has decreased.
D) Portfolio demand for money has decreaseD.Holding money for everyday purchases refers to the transactions demand for money,which will be lower when money rapidly loses its value during periods of hyperinflation.

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