To end a hyperinflation, a government trying to reduce its reliance on seigniorage would:
A) print more money.
B) raise taxes and cut spending.
C) lower taxes and increase spending.
D) lower interest rates.

Question

Quizplus · Accepted Answer

To end hyperinflation, a government must reduce its reliance on seigniorage (the practice of printing money to pay for government expenses). The most effective way to do this is to raise taxes and cut spending, which reduces the government's need to print money and can help restore confidence in the country's currency. Printing more money (choice A) would only exacerbate the problem, while lowering taxes and increasing spending (choice C) and lowering interest rates (choice D) would also increase the money supply and worsen inflation.

To End a Hyperinflation, a Government Trying to Reduce Its