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Economics · Oct / Nov 2023 · Paper 12 · Question 23

2281Inflation

What must have happened in a country when it experienced an annual rate of inflation of 100%?

  1. AThe money supply doubled.
  2. BThe price level halved.
  3. CThe purchasing power of money halved.
  4. DThe real value of money doubled.

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Correct answer: C. The purchasing power of money halved.

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