In countries that have experienced hyperinflation, what role have large government budget deficits played in causing the very high inflation rates?
What will be an ideal response?
The large government budget deficits lead to the massive increases in the money supply necessary to generate the hyperinflation. The public, especially in the developing world, will not buy the government bonds necessary to finance the large budget deficits. The central bank has had to purchase the government bonds, which has sent the money supply through the roof, leading to hyperinflation.
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The cross elasticity of demand between DVDs and DVD players is likely to be
a. zero. b. positive. c. negative. d. undefined.
Which is not an essential characteristic of a perfectly competitive market?
A. Goods are standardized. B. Buyers have perfect information. C. Goods from one seller cannot be distinguished from another's. D. Firms have limited market power.
Which of the following is a positive economic statement?
a. Raising the federal minimum wage to $6.50 per hour will cause the rate of unemployment to increase. b. The United States spends too much on welfare. c. Philosophy is not as interesting as economics. d. Cold weather is much more enjoyable than warm weather.
A possible benefit of unions is lower turnover among workers, which in turn leads to lower training costs.
Answer the following statement true (T) or false (F)