High rates of inflation often result in people spending inordinate amounts of time trying to make transactions and finding ways to keep the real value of their money from decreasing. This is an example of _____ costs.
A)shoe-leather
B)menu
C)efficiency wage
D)unit-of-account

Question

Quizplus · Accepted Answer

Shoe-leather costs refer to the resources people use to counteract the effects of inflation, such as spending more time and money to make transactions and store value. This is exactly what is described in the question. Menu costs refer to the costs of changing prices in response to inflation, efficiency wage refers to the practice of paying workers above the market wage to increase productivity, and unit-of-account costs refer to confusion and uncertainty about the value of money due to inflation.

High Rates of Inflation Often Result in People Spending Inordinate