Answer:
D
Explanation:
Inflation can be defined as an increase in the cost of living as the price of goods and services rise.
Inflation can affect the economy in both positive and negative ways. The negative effects of inflation include an increase in the opportunity cost of holding money, uncertainty over future inflation which may lower investment and savings, inflation can also lead to shortage of goods as consumers begin to store goods out of concern that prices will increase in latter future.
Positive effects include reduction in
unemployment due to nominal wage rigidity, encouraging loans and investment instead of money hoarding.
Answer:
The correct answer is letter "D": living adjustments as inflation increases.
Explanation:
Shoe-leather costs is one of the costs of inflation alongside the loss of purchasing power and the redistribution of wealth. Shoe-leather costs refers to all the efforts individuals make to mitigate the effects of inflation. This is typically achieved by saving more money or requesting more bank loans.
