Evidence on Hyperinflationary Periods Indicates

question 142

Multiple Choice

Evidence on hyperinflationary periods indicates:

• A) a complete breakdown of the monetary exchange rate theory in the short run.
• B) that it takes longer for monetary and price level swings to show up in the exchange rate data.
• C) that the relationship between high inflation and exchange depreciation is much tighter even in the short run.
• D) that the government's inability to control monetary growth led to the currency becoming completely worthless domestically but, ironically, more valuable outside the nation.

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Definitions:

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