During a Period of Hyperinflation

question 295

Multiple Choice

During a period of hyperinflation,

• A) creditors gain because their loans are repaid with dollars of higher value.
• B) people tend to hold goods rather than money.
• C) income is redistributed away from borrowers.
• D) the real value of the national currency rises.

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Definitions:

Monthly Basis

Refers to something that occurs, is measured, or is evaluated once every month.

Compounded Monthly

This refers to the method by which interest earnings are calculated on a monthly basis, with each month's interest being added to the principal for the calculation of the next month's interest.

Loan Rate

The interest rate applied to the amount of money borrowed from a lender, typically expressed as an annual percentage rate (APR).

Monthly Payment

The amount that is due every month to repay a loan, typically consisting of both principal and interest components, over a set period.