Question

"hyper inflation has adverse social and economic consequences " explain ​

Answer 1

Explanation:

Hyperinflation erodes the value of currency and can render it worthless. The effect on a nation's economy is substantial. It saps tax revenues, shutters businesses, raises the unemployment rate, and drives the cost of living so high that political instability ensues.

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Answer 2

Hyperinflation has adverse social and economic consequence.

Explanation:

Hyperinflation occurs when there is a massive devaluation in the value of a currency. It ultimately leads to rapid rise in the price of goods and services in a short span of time. During hyperinflation, prices skyrocket to more than 50 % of the normal price.

Hyperinflation has an adverse effect on the social and economic aspects of a country. High prices of goods and services lead to the fall of demand as many people start to buy less. The society consumes less and avoid using multiple services. This eventually leads to the fall in the service sector which again affects the economy as service sector contributes massively to the economy. Perhaps, the most affected during hyperinflation are the low income people and the wage earners, they have to pay high prices for goods and services with the little amount of income they earn.

Another consequence would be loss in income generation. People would start withdrawing their savings to meet the high prices of goods and services. This will make the banks go bankrupt. Hence, income cannot be generated as banks would have no capital to invest.

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