During Hyperinflation, the Value of Money Drops So Quickly That

question 101

Multiple Choice

During hyperinflation, the value of money drops so quickly that people would not want to hold money balances for very long. This will cause:

• A) the money supply to decrease.
• B) the inflation to decrease.
• C) the nominal interest rate to decrease.
• D) velocity to increase.

---

Definitions:

Rational Behavior

Decision-making behavior that is consistent with logical or sensible choice, aiming to maximize personal advantage in terms of utility or profit.

Economic Actors

Individuals, households, businesses, and governments that make decisions about the allocation of resources and consumption of goods and services in an economy.

Systematic Mistakes

Errors that occur consistently as a result of a flawed system, process, or mechanism.

Statistical Probability

The likelihood of an event occurring, based on the analysis of numerical data.