News article about : Unrestrained Money Supply Growth Sinking Zim Dollar. Answer question: Do you agree with the following statement; ‘hyperinflation lowers potential GDP because hyperinflation will...

Running Head: INTERNATIONAL ECONOMICS    1
INTERNATIONAL ECONOMICS        4
Unrestrained Money Supply Growth Sinking Zim Dollar
Impact of Hyperinflation on Potential GDP
    Hyperinflation is a term that can be used to describe rapid, excess and out-of-control price increase in the economy (Hussaini, 2020). As in Zimbabwe, the situation is grim because there is a severe economic downturn and by 2020, as predicted by the United Nations, the economy will further shrink to 2.5 percent. Before over viewing the situation let us understand the basic concepts of financial market. The financial market is operated by direct finance and indirect finance.
In direct finance, the funds are gathered from the lenders such as business firms, household expenditures, government organization and those funds are operated into the financial markets and it goes to the borrowers. In an indirect financial system, the funds goes to the financial intermediaries such as transaction costs, pooling risk, asymmetric information and economies of scope and then the funds reaches to the borrowers...