Question

Explain the following:

Hyper inflation

Answer 1

Hyper inflation is inflation where the general price level increases at the rate of 200 percent or more per month. Here, the price rise is ten or even a hundredfold in a month.

Answer 2

Hyper inflation is also known as galloping inflation, which occurs when the annual increase in prices is more than 20 percent to 100 percent or even more. The economic situation becomes very dangerous. Money becomes almost worthless which results in complete collapse of currency and the monetary system and economic and political life get disrupted.