Inflation can impose significant costs and adversely distort economic systems. Identify whether the costs/distorting affects listed...

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Inflation can impose significant costs and adversely distort economic systems. Identify whether the costs/distorting affects listed below are as a result of menu costs, shoe-leather-costs or unit-of-account costs. Menu Costs Shoe-Leather Costs Unit-of-Account Costs Can cause distortion to the tax system. People spend time converting money into something that better holds value. Causes difficulty in firms and individuals financial planning. Can lead to stores listing prices in more stable currencies. Causes costs associated Makes money a less with changing prices in stores. reliable source of measurement. Discourages people from holding money. Can reduce the quality of economic decisions. Inflation can impose significant costs and adversely distort economic systems. Identify whether the costs/distorting affects listed below are as a result of menu costs, shoe-leather-costs or unit-of-account costs. Menu Costs Shoe-Leather Costs Unit-of-Account Costs Can cause distortion to the tax system. People spend time converting money into something that better holds value. Causes difficulty in firms and individuals financial planning. Can lead to stores listing prices in more stable currencies. Causes costs associated Makes money a less with changing prices in stores. reliable source of measurement. Discourages people from holding money. Can reduce the quality of economic decisions.

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Categorizing the effects of inflation Heres how the listed effects of inflation can be categorized M... View the full answer