O-LevelEconomicsGovernment and the macroeconomy2281/12 · Oct/Nov 2019 · Q231 Mark
Venezuela, a leading world oil producer, has experienced hyperinflation of over 400% per annum in recent years. How does hyperinflation affect an economy?
Aprices: fluctuate up and down, effect: consumers are uncertain about future price levels
Bprices: fluctuate up and down, effect: consumers can anticipate future price levels
Cprices: rise very rapidly, effect: value of fixed assets remains stable
Dprices: rise very rapidly, effect: money has limited worth as a medium of exchange
✓ Correct answer
D: prices: rise very rapidly, effect: money has limited worth as a medium of exchange
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