Which of the Following Costs of Inflation Can Be Significant

question 59

Multiple Choice

Which of the following costs of inflation can be significant even if actual inflation and expected inflation are the same?

• A)menu costs
• B)inflation tax
• C)shoeleather costs
• D)All of the above are correct.

---

Definitions:

Value Increase

An appreciation in the worth or market value of an asset over time.

Time To Expiration

The duration remaining until the expiration date of a financial contract, most commonly used in the context of options or other derivative instruments.

Call Increases

The rise in the value or price of call options, which are contracts granting the right to purchase a stock at a specified price within a certain period.

Value

The monetary, material, or assessed worth of an asset, good, or service.