Suppose that very significant increases in the money supply are anticipated to result in hyperinflation. As a result, people begin to consider the purchase of property and other commodities. What does this behavior exemplify

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03-12-2021
Business

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Suppose that very significant increases in the money supply are anticipated to result in hyperinflation. As a result, people begin to consider the purchase of property and other commodities. What does this behavior exemplify

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jayilych4real jayilych4real · Answer 1 · 2021-12-15T08:57:16+01:00

If people begin to consider the purchase of property and other commodities because there is an expected hyperinflation, then this exemplifies:

The rational expectation theory that people behave rationally.

According to the given question, we are asked to state what is exemplified when people begin to consider the purchase of property and other commodities because there is an expected hyperinflation.

As a result of this, we can see that if there is a significant increase in the money supply and this is expected to result on hyperinflation, then people begin to consider the purchase of property and other commodities, this behavior shows the rational expectation theory which states that people would make rational decisions

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