Increases in the rate of inflation will induce consumers to make more frequent trips to the bank to withdraw cash whenever the cost of the extra trips is __________ the benefit of holding less cash subject to purchasing power losses from inflation.

Question

Quizplus · Accepted Answer

Consumers will make more frequent trips to the bank when the cost of these trips is less than the benefit of holding less cash, as holding cash during inflation results in purchasing power losses.

Increases in the Rate of Inflation Will Induce Consumers to Make