The costs of hyperinflation on an economy are:

Question

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Hyperinflation creates a vicious spending-price spiral where rising prices lead to people buying more and hoarding goods, which in turn leads to further upward pressure on prices. This can lead to an overall decline in economic output and a loss of wealth for both lenders and borrowers, as the currency loses its value rapidly. Life insurance policies may also be jeopardized as the value of payouts may not keep up with the rising costs of goods and services. Option A is incorrect as only a select few who are able to capitalize on the inflation will enjoy reselling goods at higher prices. Option B is incorrect as hyperinflation can actually cause a bigger gap in wealth between lenders and borrowers due to rapid devaluation of currency.

The Costs of Hyperinflation on an Economy Are