The economic costs of inflation include

Question

Quizplus · Accepted Answer

Inflation can lead to various economic costs, including "shoe-leather costs" associated with the effort to manage cash in a way that minimizes the loss of purchasing power, tax distortions that arise because inflation can push individuals into higher tax brackets (even if their real income hasn't increased), an unfair distribution of gains and losses depending on the timing and nature of investments and debts, and difficulties for institutions in adapting to rapidly changing economic conditions. Therefore, all of the options listed (A, B, C, and D) are correct representations of the economic costs of inflation.

The Economic Costs of Inflation Include