What system do people revert to in cases of abnormal inflation?

In cases of abnormal inflation, people often revert to the barter system as a means of trade. This happens because, during periods of hyperinflation, the value of money can erode rapidly, making it less reliable for transactions. As prices skyrocket, individuals find it increasingly difficult to determine the value of currency, leading them to seek more stable forms of exchange.

The barter system allows for direct trade of goods and services without the use of money, thereby bypassing issues related to currency devaluation. For example, if a person has a surplus of food but needs clothing, they can trade that food directly with someone who has an abundance of clothing. This system has the benefit of ensuring that both parties still receive value without relying on a potentially worthless currency.

Other systems listed, such as fiat currency and the gold standard, are typically less functional during hyperinflation. Fiat currency becomes unreliable due to its dependence on the economy’s stability, while the gold system can restrict trade due to a limited supply of gold. The leverage system is not a relevant substitute in this context, as it pertains more to financing and borrowing rather than a method of exchanging goods.