The Case of Hyperinflation in Zimbabwe in the Late 2000s

question 82

Multiple Choice

The case of hyperinflation in Zimbabwe in the late 2000s was an example of the effects of:

• A) the government monetizing its debt.
• B) large rainfall shocks.
• C) amplification mechanisms.
• D) a lack of foreign aid.

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Definitions:

Dividends

Funds disbursed by a company to its members who hold shares, generally sourced from the company's income.

EBIT

Excluding interest and tax payments, Earnings Before Interest and Taxes provides an assessment of a firm's economic performance.

Leverage

The use of borrowed money (debt) to amplify the potential return on investment.

EAT

Earnings After Tax, which refers to the net profit a company makes after deducting all its costs, including taxes.