12
QuizMultiple Choice

Inflation and Stagflation — Quiz

Question 12 • Personal Finance and Economics

Hyperinflation can occur when

Answer
A
companies raise prices to pass on costs to consumers.
B
consumers begin purchasing more goods.
C
the government prints a ton of money in order to pay off its debt.
D
producers need more money to make and distribute goods.

Explanation

Hyperinflation is an extremely rapid rise in prices, often caused when a government creates far more money than the economy can support. Printing a large amount of money to pay off debt increases the money supply and can make each unit of money worth less. Therefore, the correct choice is “the government prints a ton of money in order to pay off its debt.”

AI-written and checked against the verified answer.

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