Question

Shoe-leather costs arise when higher inflation rates induce people to __________.

a. spend more time
b. looking for bargains
c. spend less time
d. looking for bargains

Answer 1

D - Hold less money

Step-by-step explanation:

Inflation is the persistent increase in the general prices of goods and services over a period of time.

During inflation period, nobody wants to hold more of cash because the value of money gets depreciated as inflation increases (prices of goods increase).

For example, shoe-leather costs increases when there is an increase in inflation and it makes more economic sense to purchase shoe-leather as it preserves the value of money.