Question

The extra costs incurred to avoid holding cash when there is inflation are called the?

Answer 1

The extra costs incurred to avoid holding cash when there is inflation is called Shoe Leather cost.

What do you understand by inflation?

The rate of price growth over a set time period is known as inflation. Sometimes the amount of inflation is expressed in general terms, such as the overall rise in price or the rise in the cost of living nationwide. However, it can also be calculated with more accuracy for some goods, such as food, or for services, like a haircut, etc. In any circumstance, inflation refers to how much the necessary array of goods and/or services has increased in price during a specific time period, most usually a year.

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