Question

In Zimbabwe in the 1990s the government resorted to printing money to pay the salaries of government employees because:

A. of declining tax revenues.
B. of high rates of inflation.
C. of a need to stimulate the economy.
D. it was a means to avoid price controls.

Answer 1

Answer: of declining tax revenues.

Explanation: Government agencies had no money to pay their workers so they started printing money. This was due to a decline of tax revenue in Zimbabwe in the 1990s. The major cause of these was asa result of inexperienced farmers causing a shortage of food supply which led to hyperinflation.