Question

Megan 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, Megan 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 ____ of inflation.

Answer 1

Shoe-leather cost.

Step-by-step explanation:

Shoe-leather cost is the term used to define the cost of time, and efforts that one puts to curb the effects of high inflation by have less cash in hand, investing in other currencies that have fewer inflation effects, and having several trips to the bank.

The term shoe-leather is named as this type of cost of inflation requires several trips to the bank to withdraw and invest the cash in the bank, thus requiring a lot of walking.

In the given case, Megan is using the cost of inflation of shoe-leather cost. Megan has to send his employee to the bank four times a day to deposit the cash to the bank.

Thus the correct answer is shoe-leather cost.