It is estimated that a 10 percent inflation in the United States would bear a shoe-leather cost of approximately ________ percent of GDP.

Question

Quizplus · Accepted Answer

Shoe-leather costs refer to the costs associated with the time and effort people spend trying to counteract the effects of inflation, such as holding less cash and making more frequent trips to the bank. These costs are relatively small compared to the overall economy, hence the correct answer is 0.25 percent of GDP.

It Is Estimated That a 10 Percent Inflation in the United