What are the effects of rapid inflation? Check all that apply. (ones in bold are correct)

- Interest rates increase.

- Banks loan more money.

- Unemployment declines.

- Uncertainty increases.

- Real income declines.

Uncertainty increases.

This is caused by lack of confidence in the country currency.

Real income declines

Inflation leads to investment problems and result to capital flight. a decline in investments implies, lower income.

Interest rates increase

The financial control institutions are forced to increase intrest rates to lower the amount of money in the economy.