The costs of inflation are ?
Correct answer: E. all of the above
- A. shoe leather costs
- B. menu costs
- C. income redistribution
- D. uncertainly
- E. all of the above
Explanation
Inflation can impose shoe-leather costs, menu costs, arbitrary income redistribution, and uncertainty about future prices and returns. Therefore, all the listed effects are recognized costs of inflation.
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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.
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