1. Question 1 of 10Of the following inflation costs, which is characterized by an increase in the
velocity of circulation of money? (Points : 10) shoe-leather costs
tax costs
uncertainty costs
confusion costsQuestion 1 of 10Of the following inflation costs, which is characterized by
an increase in the velocity of circulation of money? (Points : 10) shoe-leather costs
tax costs
uncertainty costs
confusion costs
Solution
ANS=SHOE LEATHER COST
The cost estimated in terms of time and energy, of efforts targetted to counteract the impacts of
inflation. The term emerges from the idea that public will cope with inflation by keeping lower
cash on hand and making more trips to the bank. During periods of inflation, interest rates
generally rise , hence keeping as much money as possible in interest-bearing accounts may be a
worthwhile strategy