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Hyperinflation

Hyperinflation is a condition in which price levels increase rapidly as the nation’s currency loses its value. This often occurs when there is a large increase in the money supply not supported by gross domestic product (GDP) growth, resulting in an imbalance in the supply and demand for the money. Economists generally use this term to refer to episodes when monthly inflation rate exceeds 50%.

Currency Impact:
As money supply increases, the demand for money goes down. In effect, hyperinflation tends to result in a rapid decrease in the value of money.

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