One of the costs associated with predictable inflation is:
A)menu costs.
B)shoe-leather costs.
C)tax distortions.
D)All of these are costs of inflation.

Question

Quizplus · Accepted Answer

Menu costs refer to the cost incurred by firms to adjust their prices due to inflation, shoe-leather costs refer to the cost of increased transactions due to inflation, and tax distortions occur when inflation pushes individuals into higher tax brackets, resulting in higher taxes. Therefore, all of these are costs associated with predictable inflation.

One of the Costs Associated with Predictable Inflation Is