The costs that arise from the way inflation makes money a less reliable unit of measurement are:
A) shoe-leather costs.
B) menu costs.
C) unit-of-account costs.
D) medium of exchange costs.

Question

Quizplus · Accepted Answer

Unit-of-account costs arise because inflation makes it difficult to accurately compare prices and determine the value of goods and services. This can lead to confusion for consumers and businesses when making purchasing and investment decisions. Shoe-leather costs refer to the costs of increased transactions and savings activities due to inflation, while menu costs refer to the costs of changing prices and adjusting financial statements. Medium of exchange costs are not directly related to the impact of inflation on the unit of measurement.

The Costs That Arise from the Way Inflation Makes Money