If not all price setters are convinced that high inflation rates will end soon, there is/are:
A) price staggering.
B) a transfer of wealth from one group to another.
C) substantial menu costs.
D) a coordination problem.
E) negative real interest rates.

Question

Quizplus · Accepted Answer

If not all price setters are convinced that high inflation rates will end soon, there is likely to be a coordination problem. This means that it will be difficult for all price setters to adjust their prices at the same time or in the same way, which can lead to further inflationary pressures. The other options may also be applicable in some cases, but a coordination problem is the most directly related to the scenario described.

If Not All Price Setters Are Convinced That High Inflation