The Cost of Changing Prices in Response to an Economic

question 99

Multiple Choice

The cost of changing prices in response to an economic shock is called

• A) the velocity of money cost.
• B) the inflation choice expenditure cost.
• C) the menu cost.
• D) the sticky price dilemma cost.

---

Definitions:

Factoring Accounts Receivable

The financial practice of selling accounts receivable to a third party at a discount to obtain immediate cash.

Installment Accounts Receivable

Receivables from sales where the customer makes regular payments over a period until the full purchase price is paid.

Dishonoring a Note

The failure to pay a promissory note when it comes due, resulting in a default.

Pledging Accounts Receivable

The practice of using accounts receivable as collateral for a loan.