The country, Oceania, is now under hyperinflation. Here is the description of wh
ID: 1224867 • Letter: T
Question
The country, Oceania, is now under hyperinflation. Here is the description of what happened there: Every- day, workers in Oceania receive salary twice, once in the noon and once in the afternoon. Usually, the afternoon salary is dramatically higher than the noon one while the noon one is astonishingly higher than yesterday's afternoon one. After getting the money, people rush out their offices seeking for foods and other necessaries. In fact, they have a 2-hour rest after each salary payment merely for this purpose. Even this is limited since foods and other goods are more and more difficult to be found. Shops and salesmen refuse to sell anything because it is too hard for them to change the tags. It is especially hard for the poor because no one want to lend anything. Even the rich choose not to hold extra local currencies; instead they exchange them to US dollars in the underground market. Please list all social costs occurred under hyperinflation described above. What do you think happened to those middle class residents who used to have some savings in local currency? Based on your answer, why rich people tend to exchange for US dollars nowadays?Explanation / Answer
1) Hyperinflation brings alot of social cost with itself. Below are the costs from the passage.
a. Workers in Oceansia receive salary twice.
b. Afternoon salary is dramatically higher than noon while.......afternoon one.
c. After getting the mponey, people rush out of their offices.......other necessaries.
d. 2 hour rest after each salary payment...
e. food and other goods were difficult to be found
f. Shops and salesmen refused to sell
g noone wants to lend to poors
2. The local currency held by the middle man used to lose its real value. As value of the currency now would not be there any more 2 hours later. This is the reason why rich used to convert their money into US dollars preserving their real value of money
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