Which inflation cost matters even if actual inflation and expected inflation are the same?
A) production costs
B) losses in real income
C) losses in tax revenue
D) menu costs

Question

Quizplus · Accepted Answer

Menu costs refer to the actual cost of changing prices due to inflation, such as the cost to reprint menus or update signage. These costs still exist even if actual and expected inflation are the same, making option D the correct choice. Production costs, losses in real income, and losses in tax revenue are all affected by differences between actual and expected inflation.

Which Inflation Cost Matters Even If Actual Inflation and Expected