Economics For Today
10th Edition
ISBN: 9781337613040
Author: Tucker
Publisher: Cengage Learning
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Question
Chapter 17, Problem 16SQ
To determine
The response of consumers during hyperinflation.
Expert Solution & Answer
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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 better transactions on a much larger scale
C. Middle class savers benefit as prices rise
D. All of the above occur
What is the effect of inflation on the real value of money?
a.
Decrease
b.
Not related
c.
No effect
d.
Increase
Discuss what caused hyperinflation in Zimbabwe and if you think this could happen in The United States.
Chapter 17 Solutions
Economics For Today
Ch. 17.2 - Prob. 1GECh. 17.2 - Prob. 2GECh. 17.2 - Prob. 1YTECh. 17.2 - Prob. 2YTECh. 17 - Prob. 1SQPCh. 17 - Prob. 2SQPCh. 17 - Prob. 3SQPCh. 17 - Prob. 4SQPCh. 17 - Prob. 5SQPCh. 17 - Prob. 6SQP
Ch. 17 - Prob. 7SQPCh. 17 - Prob. 8SQPCh. 17 - Prob. 9SQPCh. 17 - Prob. 10SQPCh. 17 - Prob. 11SQPCh. 17 - Prob. 1SQCh. 17 - Prob. 2SQCh. 17 - Prob. 3SQCh. 17 - Prob. 4SQCh. 17 - Prob. 5SQCh. 17 - Prob. 6SQCh. 17 - Prob. 7SQCh. 17 - Prob. 8SQCh. 17 - Prob. 9SQCh. 17 - Prob. 10SQCh. 17 - Prob. 11SQCh. 17 - Prob. 12SQCh. 17 - Prob. 13SQCh. 17 - Prob. 14SQCh. 17 - Prob. 15SQCh. 17 - Prob. 16SQCh. 17 - Prob. 17SQCh. 17 - Prob. 18SQCh. 17 - Prob. 19SQCh. 17 - Prob. 20SQ
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Similar questions
- If you deposit money in the bank for one year scenario 1: nominal interest rate = 10%, inflation rate = 0%  Scenario 2: normal interest rate = 25%, inflation rate = 15% In which scenario does the real value of the deposit grow the most? Explain.arrow_forwardWhat are the primary causes and potential socio-economic consequences of hyperinflation on a nation's economy?arrow_forward7. Consequences of hyperinflation Which of the following are consequences of hyperinflation? Check all that apply People spend significant time and effort buying goods and services to avoid losing purchasing power. Investors make speculative rather than productive investments. People hold on to money as long as possible. People keep less of their money in the bank and more of it under their mattresses ( that is , in cash).arrow_forward
- Explain the negative impact of hyperinflation phenomenonarrow_forwardIf the inflation rate is 8% and cost of money is 12%, what interest rate will take care of the inflation and the cost of money ?arrow_forwardDescribe inflation, explain how it happens and describe its effect on purchasing power?arrow_forward
- Fiat money is Select one: a.money backed by gold or some other precious metal. b.commodity money like salt. c.valuable only because some authority decrees it to be. d.the name given to Italian lira when it is falling in value. One of the impacts of inflation is Select one: a.the real value of money falls. b.wealth is transferred from borrowers to savers. c.an increase in speculative holdings of cash. d.higher real interest rates.arrow_forwardHow might rapid inflation affect college enrollments?arrow_forwardWhat happened during hyperinflations?arrow_forward
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