Which of the following best defines hyperinflation?

Hyperinflation is defined as an extremely high inflation rate, typically characterized by a rate of over 50% per month. This type of inflation reflects a rapid increase in prices due to a variety of economic factors, including excessive money supply, loss of confidence in a currency's value, and significant disruptions in the economy. In a hyperinflationary environment, the value of currency diminishes at an accelerating rate, leading to dramatic shifts in consumer behavior, where people may prefer to spend their money quickly rather than hold onto it, as they fear further devaluation.

The other options describe conditions that are not associated with hyperinflation. A consistent inflation rate under 2% is indicative of a stable economy, where prices increase at a modest and predictable rate. A moderate inflation rate of around 5% also suggests economic stability, allowing businesses and consumers to plan effectively. Lastly, an unstable and unpredictable inflation rate, while concerning, does not reach the extreme levels necessary to classify it as hyperinflation; it might suggest a volatile economic environment but does not meet the criteria of sustained high inflation that hyperinflation embodies.