Which of the following would be considered a resource cost of inflation?
A) A cost of living adjustment
B) Loss of purchasing power
C) Additional trips to the bank
D) Adjusting nominal interest rate to get real rates
E) Creeping inflation

Question

Quizplus · Accepted Answer

Additional trips to the bank represent a resource cost of inflation, often referred to as "shoe leather costs," which are the costs associated with the increased frequency of transactions to manage cash holdings during inflationary periods.

Which of the Following Would Be Considered a Resource Cost