You have to pay costs for your business now but you also have to enter into long-term contracts to repay loans in the future.If inflation occurs,the best term for the problem that occurs in this case is:
A) menu costs.
B) price confusion.
C) future price uncertainty.
D) deflationary price pressures.
E) present value/future value uncertainty.

Question

Quizplus · Accepted Answer

Future price uncertainty refers to the uncertainty of the future value of money, which is relevant when entering into a long-term contract. Inflation can cause future prices to be higher than expected, which can lead to difficulties in meeting the repayment obligations of loans taken out in the present. Menu costs refer to the costs associated with adjusting prices, price confusion is not a recognized economic term, deflationary price pressures refer specifically to prices falling rather than rising, and present value/future value uncertainty generally refers to uncertainty around investment returns rather than loan repayments.

You Have to Pay Costs for Your Business Now but You