Question

According to the? BBC, inflation in the country of Zimbabwe reached an annualized rate of? 231,000,000 percent in October of 2008. Prices got so high that in January of? 2009, the? country's central bank long dash—the Reserve Bank of Zimbabwelong dash—introduced a? $100 trillion bill. Use the following link to read the summary of? Zimbabwe's experience with hyperinflation in? Wikipedia:

?http://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe?).

??

What was the root cause of hyperinflation in? Zimbabwe?

A.

There was an increase in the money supply in excess of the growth rate of real GDP.

B.

Zimbabwe adopted the? IMF's Economic Structural Adjustment Programme.

C.

The government confiscated private farms from white landowners.

D.

The central bank abandoned the Zimbabwean dollar.

What were some of the costs of the? hyperinflation?

?(Check

all that

apply?.)

A.

Businesses were forced to adjust prices several times per day.

B.

There were increased costs from differential pricing between the black market and the official market.

C.

People spent time exchanging money multiple times per day.

D.

Price controls were applied.

What were some of the? benefits?

?(Check

all that

apply?.)

A.

Most citizens became trillionaires.

B.

The government gained the seignorage.

C.

Businesses were allowed to introduce differential? pricing, such as charging different prices for? mini-bus rides.

D.

The black market that developed sold goods at lower prices than the official markets.

What were some of the adaptations that the country adopted to cope with the? situation?

?(Check

all that

apply?.)

A.

The adoption of fiscal restraint by the government.

B.

Redenominations of the Zimbabwean dollar.

C.

The use of foreign currencies for transactions.

D.

The use of the black market for many transactions.

Answer 1