_____ are two types of transaction costs that are associated with inflation.
A) Shoe-leather costs and sunk costs
B) Menu costs and sunk costs
C) Sunk costs and variable costs
D) Menu costs and shoe-leather costs

Question

Quizplus · Accepted Answer

Menu costs and shoe-leather costs are two types of transaction costs associated with inflation. Menu costs refer to the costs businesses incur when they need to change prices frequently due to inflation. Shoe-leather costs refer to the costs individuals incur by trying to avoid holding onto cash that will lose value due to inflation, such as the time and effort spent going to the bank more frequently.

_____ Are Two Types of Transaction Costs That Are Associated