username3896148
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When does inflation get out of control?
How would the government look to control inflation?
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stephsmhb
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(Original post by libby341)
When does inflation get out of control?
How would the government look to control inflation?
I guess it depends per country. The UK has a target of 2% and so when inflation gets to <1% or >3% that could be classified as out of control.
Inflation is controlled through monetary policy, mainly interest rates. Be careful though, as the government doesn't control this, the central bank does (Bank Of England).
Hope that helps! Feel free to message me if you have any further questions.
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MindMax2000
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(Original post by libby341)
When does inflation get out of control?
How would the government look to control inflation?
I think you're referring to hyperinflation. See the following for examples: https://www.cnbc.com/2011/02/14/The-...-All-Time.html. See the following for the definition: https://www.investopedia.com/terms/h/hyperinflation.asp

If so, the first thing they should do is get rid of whoever is hired as the central banker or whoever is causing the inflation.
In practice, they would probably cut back on spending/borrowing, and consider replacing the currency with another denomination. After WW1, Germany was experiencing a period of hyperinflation, and they resolved to replacing the currency with another denomination to make things more stable e.g. swapping 12 trillion marks for 2 deustchmarks (or what the currency was at the time - sorry couldn't find the latter's name of the currency).
The government can alternatively use currency substitution where they peg the national currency with a more stable currency e.g. Panama use US Dollars as opposed to their own currency (see: https://www.economicshelp.org/blog/g...-substitution/)
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