A consequence of hyperinflation is that people
A) who make fixed-payment loans to others receive higher payments as inflation increases.
B) spend time trying to keep their money holdings near zero.
C) receive higher real wage hikes, which increases their purchasing power for goods and services.
D) want to lend funds because interest rates are so high.
E) increase the quantity of money demanded.

Question

Quizplus · Accepted Answer

Hyperinflation causes the value of money to rapidly decrease, making it less valuable over time. As a result, people tend to try to keep their money holdings as close to zero as possible in order to avoid losing value through inflation. This can make it difficult for individuals to save money or make longer-term investments, as they are constantly trying to keep their money in use or in assets that will maintain their value.

A Consequence of Hyperinflation Is That People