The case of hyperinflation in Zimbabwe in the late 2000s was an example of the effects of:
A) the government monetizing its debt.
B) large rainfall shocks.
C) amplification mechanisms.
D) a lack of foreign aid.

Question

Quizplus · Accepted Answer

The hyperinflation in Zimbabwe was caused by the government's decision to monetize its debt, which led to an increase in the money supply without an increase in the supply of goods and services, resulting in a rapid depreciation of the currency and soaring prices.

The Case of Hyperinflation in Zimbabwe in the Late 2000s