In practice, in order to stop a hyperinflation, in addition to stopping monetary growth, the government must:
A) lower taxes and raise government spending.
B) raise taxes and reduce government spending.
C) change from one kind of currency to another.
D) call for a new election.

Question

Quizplus · Accepted Answer

To stop hyperinflation, the government needs to reduce the amount of money in circulation by cutting government spending, reducing subsidies, reducing welfare payments, or increasing taxes. This will reduce the demand pressures on prices, and bring down the inflation rate. Lowering taxes and raising government spending would have the opposite effect and worsen the hyperinflation. Changing the currency or calling for new elections are not always necessary or effective in tackling hyperinflation.

In Practice, in Order to Stop a Hyperinflation, in Addition