Question

which costs of inflation could the government reduce without reducing inflation? a. arbitrary redistributions of wealth b. shoeleather costs c. menu costs d. none of the above is correct.

Answer 1

Answer:

A is the correct answer.

Explanation:

Inflation causes an arbitrary redistribution of wealth and income. Unexpected inflation is responsible for it. The redistribution of income is caused because the wages and salaries increase rapidly the prices.  and other wages and salaries slowly than the price level. The increase in the prices of some assets more rapidly than the price level while the asset prices increase slower than the price level causes the redistribution.