During Periods of Hyperinflation,money Does Not Hold Its Value Long

question 71

Multiple Choice

During periods of hyperinflation,money does not hold its value long enough to make everyday market purchases; therefore,people hold as little as possible for as short a time as possible.This description implies that the

• A)Transactions demand for money has decreased.
• B)Precautionary demand for money has increased.
• C)Speculative demand for money has decreased.
• D)Portfolio demand for money has decreaseD.Holding money for everyday purchases refers to the transactions demand for money,which will be lower when money rapidly loses its value during periods of hyperinflation.

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