During Periods of Hyperinflation, Which of the Following Is the Most

question 36

Multiple Choice

During periods of hyperinflation, which of the following is the most likely response of consumers?

• A) Save as much as possible.
• B) Spend money as fast as possible.
• C) Invest as much as possible.
• D) Lend money.

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Definitions:

Externality

An economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume.

Activity

Any action or task undertaken by individuals or groups, often resulting in production or consumption of goods or services.

External Costs

Costs of economic activities that affect third parties outside the transaction, which are not reflected in market prices.

Tax

A compulsory financial charge or levy imposed by a government on individuals or entities to fund public expenditures.