Economics 9708 · AS & A Level · Balance of payments

Balance of payments — practice question

(a)[2]

(i) What does hyperinflation mean?

(a)[2]

(ii) Describe what happened to the real value of money in Zimbabwe each day in November 2008.

(b)[4]

Explain how a government can bring about hyperinflation.

(c)[2]

(i) Account for the shopkeepers’ handling of cheque (check) payments.

(c)[4]

(ii) Explain how workers and foreign investors could react to hyperinflation.

(d)[6]

Discuss whether the change in Zimbabwe’s current account is the outcome one would expect when a country has the world’s highest inflation rate.

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