Menu costs refers to a. the distortion in incentives created by inflation when taxes do not adjust for inflation. b. resources used by people to maintain lower money holdings when inflation is high. c. resources used to price shop during times of high inflation. d. the cost of more frequent price changes induced by higher inflation.

Question

Diana Nolan

Business

26 June, 15:56

Menu costs refers to a. the distortion in incentives created by inflation when taxes do not adjust for inflation. b. resources used by people to maintain lower money holdings when inflation is high. c. resources used to price shop during times of high inflation. d. the cost of more frequent price changes induced by higher inflation.

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Answers (1)

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Nick · Answer 1

The correct answer is D

Explanation:

Menu costs is the costs which is referred to as the economic term and it is used for describing the cost or the expense which is incurred by the firms or the companies so that could change the prices. It is that cost in which the prices are sticky.

So, it will be known as the cost of the frequent price variations which is induced through the higher inflation.