Question

Shen manages a grocery store in a country experiencing a high rate of inflation. He is paid in cash. On payday, he immediately goes out and buys up as many goods as he can for the next two weeks in order to prevent the money in his wallet from losing value. This is an example of the _______ of inflation.

Answer 1

Answer:

The correct answer is "Shoe-leather effect"

Explanation:

shoe leather cost: In order to reduce the inflation, the people try to hold less cash on hand to reduce the tax inflation. The shoe leather cost refers to the value, in time and energy, of efforts intended to neutralize the effects of inflation.