Which of the following is true about hyperinflation? Question 2 options: a) b) c

Question

Which of the following is true about hyperinflation?

Question 2 options:

a)

b)

c)

d)

Financial assets in a hyperinflated currency quickly become worthless.

The natural rate of employment:

Question 15 options:

a)

b)

c)

d)

is the rate at which the actual inflation rate is equal to people's inflationary expectations.

Which of the following would likely NOT cause inflation?

Question 14 options:

a)

b)

c)

d)

a)

Hyperinflation can be stopped by printing larger denominations of paper currency.

b)

There have been no cases of hyperinflation in the world in the last two decades.

c)

Hyperinflation occurs when the inflation rate exceeds 1,000% per year.

d)

Financial assets in a hyperinflated currency quickly become worthless.

Explanation / Answer

a) Hyperinflation is a situation when the inflation is increasing at a very fast rate. It decreases the value of financial asset very quickly. The answer is "D".

b) "D"

The natural rate of unemployment is a sum of structural and frictional unemployment. it occurs at the point where actual inflation and expected inflation is the same.

c) "D"

Consumer confidence falls due to global economic concerns will cause a deflation and subdue the demand. This can never cause an inflation.  

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