Final answer:
The theory of overextension posits that overgrowth of states can lead them to become unstable, potentially causing collapse. This can be economically related to hyperinflation, where excessive printing of money leads to instability and possible collapse, showcasing the dangers of unregulated inflationary practices.
Step-by-step explanation:
The theory of overextension suggests that when states grow too large, they may become unstable or at risk of collapse. This concept is not simply about geographical size, but the administrative, economic, and social challenges large states can face. In discussing state's overextension, the direct answer to the provided multiple-choice question is (b) They become unstable.
Hyperinflation is a related economic phenomenon where a state may print an excessive amount of money, usually to cover unsustainable government spending which cannot be financed by taxes or borrowing. This excess in monetary supply, without a corresponding increase in goods and services, can lead to a drastic and rapid increase in prices, causing economic instability, even to the point of a state's governmental collapse. Therefore, economists often worry about the dangers of unchecked inflation and the stability it can affect.
Additionally, the feasibility of imposing rules to prevent the accumulation of wealth or power is questioned, given human nature's inclination towards competition and acquisition. The enforcement of such rules could be viewed as oppressive and could potentially destabilize society if antithetical to ingrained societal values.