Question

Janis 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, Janis sends an employee to the bank four times per day to make deposits in a interest-bearing account that protects the store's revenues from the effects of inflation.(a) This is an example of the:i. menu costsii. unit of account costsiii. shoe leather costs of inflation.(b) Explain briefly the nature of the costs imposed.

Answer 1

shoe leather costs

Step-by-step explanation:

The shoe-leather cost is the cost that deals in time and effort which people spent against the inflation effect i.e reduction in inflation like less cash held so that it would make extra trips to the bank

Also if the inflation of the economy rises so the consumer spending would be less as it directly affects the purchasing power of the customer

So the time and cost effort spent is known as shoe leather cost