As prices rise, there will be costs of constantly changing price-tags and reprinting price-lists This is called ?
Correct answer: B. menu costs of inflation
- A. real balance effect
- B. menu costs of inflation
- C. money illusion.
- D. cost-push inflation.
Explanation
Menu costs are the administrative costs of changing prices, such as replacing price tags and reprinting price lists, when inflation occurs. The real balance effect concerns the purchasing power of money balances, not repricing.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
Practise Macroeconomics
1,499 free Macroeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Macroeconomics questions
Government policies that focus on changing taxes and government spending are called ?
If interest rates rise then costs are likely to _______ and demand is likely to _________?
An economy that trades with and has financial dealing with other countries is called a/an ________ economy?
The natural rate of unemployment is generally thought of as the ?
Unemployment resulting from changes in the pattern of demand or supply in the economy is called _______ unemployment?
Unemployment resulting from real wages being above their equilibrium level is called _________ unemployment?