If inflation is completely anticipated
A)no one loses in the economy.
B)borrowers lose in the economy.
C)lenders lose in the economy.
D)firms lose because they incur menu costs.

Question

Quizplus · Accepted Answer

When inflation is completely anticipated, firms may still incur menu costs, which are the costs associated with changing prices (such as reprinting menus, updating price lists, and the administrative costs of changing prices in the system). This can be a loss for firms even when inflation is anticipated.

If Inflation Is Completely Anticipated