Compared to periods of lower rates of inflation, during a hyperinflation all of the following occur except:
A) shoeleather costs increase.
B) menu costs become larger.
C) relative prices do a better job of reflecting true scarcity.
D) tax distortions increase.

Question

Quizplus · Accepted Answer

During hyperinflation, prices become so volatile and unpredictable that relative prices become distorted, and do not accurately reflect the true scarcity of goods and services.

Compared to Periods of Lower Rates of Inflation, During a Hyperinflation