Question : In which situation do wages and prices chase each other at a very quick speed?
Option 1: Disinflation
Option 2: Reflation
Option 3: Stagflation
Option 4: Hyperinflation
Correct Answer: Hyperinflation
Solution : The correct answer is Hyperinflation .
Wages and prices tend to chase each other at a very quick speed during periods of hyperinflation. It occurs when prices in an economy rise very quickly, often by hundreds or even thousands of per cent per year. This makes the country's money lose its value fast, causing everyday things to become extremely expensive.
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