Which of the Following Is NOT a Cost of Inflation

question 113

Multiple Choice

Which of the following is NOT a cost of inflation?

• A) price confusion
• B) declining wages
• C) money illusion
• D) inflation tax

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Definitions:

Producer Surplus

The difference between the amount that producers are willing and able to sell a product for and the actual amount they do sell it for.

Consumers Surplus

The gap between the aggregate sum consumers are ready and capable of paying for a good or service versus what they actually shell out.

Elastic Demand

A market condition where the quantity demanded of a good or service significantly changes in response to a change in price.

Inelastic Demand

A situation where the demand for a product does not significantly change with a change in price.