The resource cost of inflation refers to
A) the opportunity cost of the resources spent coping with inflation
B) the redistribution of resources due to inflation
C) the lost purchasing power due to inflation
D) the lost real income due to inflation
E) the resources lost due to asking for higher nominal wage increase

Question

Quizplus · Accepted Answer

The resource cost of inflation refers to the opportunity cost of the resources spent coping with inflation, such as the time and effort spent adjusting prices, wages, and contracts. This can involve increased administrative costs, uncertainty, and distortions in economic decision-making, leading to a less productive use of resources.

The Resource Cost of Inflation Refers to