When people use more resources to reduce their money holdings because of high inflation, this an example of which of the following?
A)inflation-induced tax distortions
B)relative-price variability costs
C)shoeleather costs
D)menu costs

Question

Quizplus · Accepted Answer

The action of reducing money holdings due to high inflation, is a cost of inflation known as "shoeleather costs". It refers to the costs of time and effort spent to avoid holding money for too long when its purchasing power is rapidly declining.

When People Use More Resources to Reduce Their Money Holdings