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Costs of Inflation: Shoe-leather Costs and Menu Costs
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Problem 10
Costs of Inflation: Shoe-leather Costs and Menu Costs
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12. Unemployment and Inflation / Costs of Inflation: Shoe-leather Costs and Menu Costs / Problem 7
Problem 7
Why are shoe-leather and menu costs more significant during hyperinflation?
A
Because inflation stabilizes, reducing the need for cash and price changes.
B
Because hyperinflation increases the value of currency, reducing these costs.
C
Because prices change rapidly, increasing the frequency of bank visits and price updates.
D
Because hyperinflation reduces the value of currency, eliminating these costs.
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