Which term describes inflation that typically exceeds 50% per month?

• A. Hyperinflation
• B. Deflation
• C. Inflation
• D. Stagflation

Answer: (A)

Hyperinflation is the term for inflation that is extraordinarily high, typically exceeding 50 percent in a single month. At that rate, prices rise so fast that money loses value almost daily, wiping out purchasing power and often pushing people to use foreign currencies or barter to avoid rapid losses. This is much more extreme than ordinary inflation, which is a steady, slower increase in the general price level, deflation which is a fall in prices, or stagflation which combines inflation with stagnant growth and high unemployment. The 50 percent-per-month threshold is a conventional rule of thumb used to signal when inflation has become hyperinflation rather than just high inflation.