Which of the following statements about stopping hyperinflation is NOT correct?
A) The government must rein in the budget deficit.
B) The growth of the money supply must slow.
C) Borrowing from foreign governments must take place.
D) A change in government and a new currency are usually required.

Question

Quizplus · Accepted Answer

Borrowing from foreign governments can actually worsen hyperinflation as it increases the money supply and can lead to a higher budget deficit. The correct statement should be that the government must reduce its reliance on borrowing and foreign aid, and instead focus on reducing the budget deficit and slowing the growth of the money supply. A change in government and a new currency may also be necessary in extreme cases, but are not always required to stop hyperinflation.

Which of the Following Statements About Stopping Hyperinflation Is NOT