According to the quantity equation, the cure for hyperinflation is:
A) higher taxes
B) reducing government spending
C) reducing money growth
D) All of these answers are correct.
E) None of these answers are correct.

Question

Quizplus · Accepted Answer

According to the quantity equation (M x V = P x Y), hyperinflation can be cured by reducing money growth (M). When the money supply is reduced, there is less money available, which reduces demand for goods and services, leading to a decrease in prices and inflation. Higher taxes (A) and reducing government spending (B) can also be effective in controlling inflation, but they are not specifically related to hyperinflation.

According to the Quantity Equation, the Cure for Hyperinflation Is