During hyperinflations, money loses value rapidly, and so consumers try to spend it as soon as they
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During hyperinflations, money loses value rapidly, and so consumers try to spend it as soon as they receive it, converting it into goods or other assets.
a. What do you think happens to the velocity of money during hyperinflations? How does that affect the inflation rate?
b. Do you think that this makes it easier or more difficult to bring hyperinflation under control?
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a During hyperinflation the velocity of money typically increases significantly Velocity of money refers to the speed at which money circulates in the ...View the full answer
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