Hyperinflation theory

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Hyperinflation theory

  1. 1. HYPER INFLATION THEORY
  2. 2. Definition for hyper inflation Hyperinflation is inflation that is very high or "out of control", a condition in which prices increase rapidly. usually more than 50% a month.
  3. 3. Causes
  4. 4. An example
  5. 5. Effects
  6. 6. How it can be tamed?• Fiscal deficit must be slashed.• Central bank funding of the reduced deficit ended.• Separating the activities of the central bank from the control of government.
  7. 7. • Controlling of either the money supply or the exchange rate.• Establishment of a ‘nominal anchor’ against which all prices could be measured.
  8. 8. Prevention• Increase the interest rate dramatically.• Cutting government spending and debt.• Increasing reserve rates for banks. But each of these steps might have their own side effects in the economy.
  9. 9. Conclusion
  10. 10. Thank you

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