One cost of an unanticipated inflation is that it
A)damages the role of prices as signals in the economy.
B)transfers wealth from borrowers to lenders.
C)decreases menu costs.
D)increases the purchasing power of money.

Question

Quizplus · Accepted Answer

Unanticipated inflation can damage the role of prices as signals in the economy by making it difficult for consumers and businesses to make informed economic decisions. Inflation can also lead to confusion and uncertainty about the true value or cost of goods and services, further complicating economic decision-making.

One Cost of an Unanticipated Inflation Is That It