In what sense is it a cost that people must spend time and resources coping with inflation?
A) Because the loss of time and resources frustrates people unnecessarily
B) Because the time and resources could have been used to produce something else instead
C) Because the time and resources could have been wasted elsewhere
D) Because the time and resources are a sunk cost
E) Because the time and resources are insufficient to cope with the problem

Question

Quizplus · Accepted Answer

Coping with inflation requires individuals to adjust their spending habits, invest in inflation-protected assets, or seek higher sources of income. The time and resources spent on these activities represent an opportunity cost because they could have been used for other productive purposes, such as increasing productivity or pursuing other beneficial activities. Therefore, it is a cost that individuals must spend time and resources on to protect themselves from inflation. Choices A, C, D, and E are incorrect because they do not accurately describe the cost of coping with inflation.

In What Sense Is It a Cost That People Must