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Author Question: Explain the economic costs of hyperinflation. What will be an ideal ... (Read 17 times)

jCorn1234

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on: Jun 30, 2018
Explain the economic costs of hyperinflation.
 
  What will be an ideal response?

Question 2

Explain seignorage.
 
  What will be an ideal response?


Meganchabluk

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Reply #1 on: Jun 30, 2018
Answer to Question 1

The transaction system works less and less well. Price signals become less and less useful. Swings in the inflation rate become larger.

Answer to Question 2

The real revenue from money creation is called seignorage. It is equal to the money creation divided by the price level.


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