Inflation induces people to spend more resources maintaining lower money holdings. The costs of doing this are called shoeleather costs.

Question

Quizplus · Accepted Answer

Shoeleather costs refer to the increased costs of transactions caused by inflation, including the time and effort (resources) spent to keep less money on hand and make more frequent transactions to avoid the devaluation of money held.

Inflation Induces People to Spend More Resources Maintaining Lower Money