The costs of expected inflation cause productive resources of an economy to be directed away from their efficient allocation. Explain how each of the following costs of expected inflation distort the allocation of productive resources:
a. shoeleather costs
b. menu costs
c. the inconvenience of a changing price level

Question

The costs of expected inflation cause productive resources of an economy to be directed away from their efficient allocation. Explain how each of the following costs of expected inflation distort the allocation of productive resources: 
a. shoeleather costs
b. menu costs
c. the inconvenience of a changing price level

Quizplus · Accepted Answer

The Answer of The costs of expected inflation cause productive resources of an economy to be directed away from their efficient allocation. Explain how each of the following costs of expected inflation distort the allocation of productive resources: 
a. shoeleather costs
b. menu costs
c. the inconvenience of a changing price level

The Costs of Expected Inflation Cause Productive Resources of an Economy