There are no costs associated with inflation if the inflation rate is perfectly anticipated.

Question

Quizplus · Accepted Answer

Even if inflation is perfectly anticipated, there are still costs associated with it, such as menu costs (the costs to firms of changing prices), shoe leather costs (the costs to individuals of managing cash balances in times of high inflation), and the distortion of tax systems that do not fully adjust for inflation, among others.

There Are No Costs Associated with Inflation If the Inflation