The time, money, and effort one has to spend managing cash in the face of inflation is referred to as:
A) shoe-leather costs.
B) menu costs.
C) tax distortions.
D) the velocity of inflation.

Question

Quizplus · Accepted Answer

Shoe-leather costs refer to the expenses incurred by individuals and businesses in managing their cash holdings and making more frequent trips to the bank due to inflation. It includes the time, money, and effort spent on withdrawing, depositing, and transferring money to avoid losses in the purchasing power of cash. Therefore, option A is the correct answer.

The Time, Money, and Effort One Has to Spend Managing