Episodes of hyperinflation are caused by:
A) severe recessions.
B) extreme economic booms.
C) extremely high rates of money growth.
D) moderately high rates of real GDP growth.

Question

Quizplus · Accepted Answer

Episodes of hyperinflation are caused by extremely high rates of money growth, where the supply of money increases much faster than the supply of goods and services. This leads to a situation where the value of money rapidly decreases, causing prices to skyrocket. Severe recessions and moderately high rates of real GDP growth are not typically associated with hyperinflation, while extreme economic booms can contribute to inflation but not necessarily hyperinflation.

Episodes of Hyperinflation Are Caused By