All of the following are costs of fully expected inflation except that expected inflation:
A)causes lower real wages.
B)leads to shoeleather costs.
C)increases menu costs.
D)leads to taxing of nominal capital gains that are not real.

Question

Quizplus · Accepted Answer

Expected inflation does not necessarily cause lower real wages, as wages can be adjusted for inflation if it is fully anticipated. The other options are costs associated with expected inflation.

All of the Following Are Costs of Fully Expected Inflation