Question

Hilary owns and operates a store in a country experiencing a high rate of inflation. Each day, some of her employees spend time tracking changes in the overall price level and changing the price tags within the store and the price lists on the store's website. This is an example of the____________of inflation.

Answer 1

Answer:

Menu costs of inflation

Explanation:

Menu costs are the costs incurred by the firms. Menu costs refers to the cost of changing the list price of the products at the shop or changing the price tag on the products. This cost included in the price of the product because time and money both are used in changing the price tags or list price. Hence, there will be a rise in the prices of goods and therefore, the economy experiencing a high rate of inflation.