Hyperdeflation is a very rare phenomenon, but it can have a big impact on an economy. For example, when prices rapidly decrease in an economy, the purchasing power of money increases. This can lead to people hoarding money and not spending it, which can in turn lead to a decrease in economic activity. Hyperdeflation can also cause problems for businesses that have fixed costs, as their profits may disappear or become negative if prices fall too low.Hyperdeflation happens when there are extremely large decreases in the general prices of goods in an economy, or correspondingly large increases in a money's purchasing power. When this happens, people tend to hoard money instead of spending it, because they know that its purchasing power will only increase with time. This can lead to a decrease in economic activity and even recession.
