Hyperinflation is caused by rates of ________ of several hundred percent or more per year,which is usually the result of governments accumulating large ________.
A) GDP growth;trade deficits
B) GDP growth;budget deficits
C) money growth;trade deficits
D) money growth;budget deficits
E) consumption growth;trade deficits

Question

Quizplus · Accepted Answer

Hyperinflation is typically caused by a rapid increase in the money supply, which is often the result of government financing their spending by printing more money. This results in a decrease in the value of the currency, which in turn drives up prices, leading to hyperinflation. Budget deficits may be one factor contributing to the increase in the money supply, but it is the increase in the supply of money itself that is the primary cause of hyperinflation. Trade deficits and GDP growth are not necessarily related to hyperinflation.

Hyperinflation Is Caused by Rates of ________ of Several Hundred