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Uploaded on Thursday 11 June, 2020 to the illusion of money |
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When the functions of money break down |
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Hyperinflation leads to two interchangeable phenomena: a stark increase in prices and a drastic devaluation of the currency. In such a scenario, a country's currency becomes so worthless that it needs replacing, the most profound example of which occurred in 1946 in war-ravaged Hungary. As hyperinflation sets in, two core functions of money break down: the store of value and the unit of value. When a currency is replaced as a remedy to such a problem, a third function breaks down consequently: the medium of exchange. Brazil's former currency was the cruzeiro real. The Brazilian real superseded it in 1994. Find out from the example provided in this tutorial how that happened.
This video is courtesy of the Khan Academy whose YouTube channel is available here. |
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