It Is Not Surprising to Learn That, During Hyperinflations, the Demand

question 55

Multiple Choice

It is not surprising to learn that, during hyperinflations, the demand for real money balances:

• A) accelerates because people need to hold more money to cover higher prices.
• B) remains constant because we are talking about real, not nominal, balances.
• C) decreases, as the value of the nominal money decreases.
• D) is unpredictable.

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