Quiz Chapter 9 Save for Later Submit Test 24 of 25 Settings

Quiz: Chapter 9 Save for Later Submit Test 24 of 25 Settings Which of the following is not a cost created by high inflation? O A. Inflationary impacts are not distrib uted evenly across the population, therefore, inflation causes the economy to redistribute income across households B. Inflation causes the real wage to fall which means that firms have to pay more or O c. Inflation changes firms\' price s which causes firms to have to use resources to physically change the marked prices, often referred to as menu costs. O D. Inflation causes the real interest rate to change which can make it more dificult to borrow and lend money Click to select your answer

Solution

Option B

Though inflation reduces the real value of wages, it is not necessary for firms to revise the wages as inflation keeps changing with the changes in macroeconomic policies.