Final answer:
Hyperinflation is a rapid increase in the price level of goods and services, occurring when the inflation rate grows exceptionally high in a short period, often observed during economic transitions. It is measured by the percentage change in the cost of a basket of goods and services.
Step-by-step explanation:
When the price level of goods and services increases rapidly over several months, it is often described as hyperinflation, which is an outburst of high inflation.
Hyperinflation typically occurs when there is an extremely rapid increase in the supply of money without a corresponding growth in the output of goods and services, which can happen in various economic situations, including a transition from a controlled economy to a market-oriented economy.
The inflation rate is measured by how much the total cost of a basket of goods and services increases over time. This price level is usually represented in index numbers with a base year of 100, which helps compare price levels at different times.
Hyperinflation represents an exceptionally high and typically accelerating inflation rate, causing money to lose its value very quickly.