Suppose inflation is currently running at 15% and, as a result, sales catalogues have to be reprinted every month.This is an example of:
A)noise in the price system
B)menu costs due to inflation
C)an unexpected redistribution in wealth
D)shoe-leather costs of inflation

Question

Quizplus · Accepted Answer

Menu costs refer to the expenses incurred by firms in order to adjust prices to changing economic conditions. In this scenario, the high rate of inflation requires sales catalogues to be reprinted every month, causing additional expenses for the firm. This is an example of menu costs due to inflation.

Suppose Inflation Is Currently Running at 15% And, as a Result