Hyperinflations ultimately are the result of excessive growth rates of the money supply; the underlying motive for the excessive money growth rates is frequently a government's: A. desire to increase prices throughout the economy. B. inability to conduct open-market operations. C. need to generate revenue to pay for spending. D. responsibility to increase nominal interest rates by increasing expected inflation.

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12-03-2021
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Hyperinflations ultimately are the result of excessive growth rates of the money supply; the underlying motive for the excessive money growth rates is frequently a government's: A. desire to increase prices throughout the economy. B. inability to conduct open-market operations. C. need to generate revenue to pay for spending. D. responsibility to increase nominal interest rates by increasing expected inflation.

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Answer:

C. need to generate revenue to pay for spending.

Explanation:

Inflation can be defined as the persistent rise in the price of goods and services in an economy.

Generally, inflation usually causes the value of money to fall and as a result, it imposes more cost on an economy.

Furthermore, when this persistent rise in the price of goods and services in an economy becomes rapid, excessive, unbearable and out of control over a period of time, it is generally referred to as hyperinflation

Hence, hyperinflations ultimately are the result of excessive growth rates of the money supply; the underlying motive for the excessive money growth rates is frequently a government's need to generate (tax) revenue to pay for spending.

Taxation can be defined as the involuntary or compulsory fees levied on individuals or business entities by the government to generate revenues used for funding public institutions and activities.