rate of inflation such as this is called hyperinflation. The German hyperinflation had
such an adverse effect on the German economy that it is often viewed as one con-
tributor to the rise of Nazism and, as a result,
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averse to inflation,
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States.
What determines whether an economy experiences inflation and,
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much? This chapter answers this question by developing the quantity theory of
money. Chapter 1 summarized this theory as one of the Ten Principles of Economics:
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