The cure for hyperinflation is:
A) reducing money growth.
B) maintaining government spending.
C) lower taxes.
D) seignorage.
E) All of these answers are correct.

Question

Quizplus · Accepted Answer

The most effective way to combat hyperinflation is to reduce the growth of money supply, thereby lowering the overall inflation rate. This can be achieved through measures like increasing interest rates, reducing government spending, and implementing tighter monetary policies. The other options, such as maintaining government spending or lowering taxes, may aggravate the problem by increasing the demand for goods and services, and thereby exacerbating inflationary pressures. Seignorage, or the profits generated from printing money, is not a sustainable solution and can lead to even greater inflation over time. Therefore, the best choice for addressing hyperinflation is to reduce money growth.

The Cure for Hyperinflation Is