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1Running head: BUSINESS ECONBusiness Econ
2Running head: BUSINESS ECONOverview Hyperinflation is considered as one of the most significant socially disparaging phenomena in this era of globalization and industrialization. The term hyperinflation is also referred to as a type of inflation, which is extremely high and unmanageable in nature. It mainly occurs when there is an extensive increase in the supply of the money within the economy whichis not balanced with the growth of Gross Domestic Product (GDP) of a particular economy. As a result, there occurs an imbalance in the supply and demand, relative to the revenue of the country. Moreover, hyperinflation is a situation when the price increases by a considerable high extent. Hyperinflation is mainly caused due to deficit spending by the government of a country. Thus, hyperinflation can be regarded as a type of inflation, which occurs consecutively for more than three years creating repeated and strong fluctuations in relation to commodity prices within the economy. Hence, it is also known as uncontrolled inflation (Dem & et. al., 2001). Explain why hyperinflation has such a devastating impact on economies. Explain what ittakes to stop hyperinflation.Hyperinflation is not a continuous procedure but very rare in nature. The primary cause for the emergence of hyperinflation in an economy is due to high disparity among the demand and supply of money. It arises due to lower confidence level on the currency of that particular economy where hyperinflation is taking place. Apart from this, another important factor which