"'We had to protect ourselves by sometimes increasing prices in bolivares up to 40%, but that is not good either, because inflation is erratic and products might become too expensive for customers.'"

This concern is closely related to a cost of inflation that was discussed in GBE. Which cost?

1. A rise in inflationary expectations.
2. Menu costs.
3. Shoe-leather costs.
4. Wealth redistributions due to long-run contracts.
5. Noise in the price system.

Need guidance with the answer but also explanation of relationship with theory for further study