Question

taylor owns and operates a store in a country experiencing a high rate of inflation. in order to prevent the value of money in her cash register from falling too quickly, taylor sends an employee to the bank four times per day to make deposits in an interest-bearing account that protects the store's revenues from the effects of inflation. this is an example of the

Answer 1

Financial management technique called inflation hedging. By depositing the cash in an interest-bearing account, Taylor is protecting the value of the store's revenue from the effects of inflation. This means that the store's revenue will maintain its purchasing power over time, even as the value of money decreases due to inflation.

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