Question

Shoe-leather costs are the: Group of answer choices effect of inflation on the prices of food, clothing, and other necessities. increased cost of transactions due to inflation. high price of leather goods. effect of inflation on transportation costs.

Answer 1

The increase in transactions caused by inflation is the correct response when it comes to the shoe leather cost effect on inflation. Therefore, choice 3 is right.

What is the cost of shoe leather?

When there is significant inflation, the shoe leather cost refers to the time and effort people spend holding less cash in order to lower the inflation tax they must pay on their cash holdings.

The extra time and convenience that must be given up to keep less money on hand than would be necessary if there were less or no inflation is a substantial cost of reducing money holdings.

In light of the cost effect of inflation on shoe leather, option 3 is thus right.

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