What is the term for an extremely high rate of inflation?

The term for an extremely high rate of inflation is hyperinflation. This phenomenon occurs when the inflation rate exceeds 50% per month, leading to a rapid and uncontrollable increase in prices. Hyperinflation erodes the real value of the local currency, causing individuals and businesses to lose their confidence in its value. As a result, people may begin to trade goods and services directly rather than use the currency. Historical instances, such as in Weimar Germany or Zimbabwe, illustrate the disruptive effects of hyperinflation on an economy.

Deflation refers to a decrease in the general price level of goods and services, which is the opposite of inflation. Stagflation is a condition characterized by stagnant economic growth, high unemployment, and high inflation occurring simultaneously. Disinflation describes a reduction in the rate of inflation but indicates that inflation is still occurring, albeit at a slower pace. Hyperinflation specifically highlights a rapid and extreme inflationary environment, making it the correct choice.