During Hyperinflations

question 9

Multiple Choice

During hyperinflations

• A)the value of money rises rapidly.
• B)money no longer functions as a good store of value and people may resort to barter transactions on a much larger scale.
• C)middle-class savers benefit as prices rise.
• D)money's value remains fixed to the price level;that is,if prices double so does the value of money.

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Definitions:

Fixed Expenses

Costs that do not change with the level of production or sales activities, such as rent, salaries, and insurance.

Break-Even Sales

The amount of revenue from sales that is exactly equal to the sum of fixed and variable costs, resulting in no profit and no loss.

Break-Even Sales

The amount of revenue needed to cover all fixed and variable expenses, resulting in neither profit nor loss.

Foreign Division

A segment or branch of a company that operates in a country different from the company's headquarters, engaging in business activities outside its home market.