Business, 06.01.2021 18:00 amselah3571

Inflation imposes many costs on the economy: shoe-leather costs, money illusion, menu costs, wealth redistribution, price confusion, future price level uncertainty, and tax distortions. For each of the following statements, determine the associated cost. Be careful! Some of the statements may not go into any of the categories because two categories are missing. a. A jeweler observes the price of gold rise and wonders if there is a shortage of gold.
b. Carson is angry because the price of donuts increased from $1 to $2 since last week
c. Your grandmother's savings account pays 2% interest, but inflation is 5%.
d. The CEO of GM worries that his revenue received in the future won't cover the expenses he incurs today.
e. Jim is reluctant to sell his stocks at the end of the year.
f. John thinks his new salary in NYC will increase his standard of living
g. Kallie is taking more trips to ATM now that the post.

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Inflation imposes many costs on the economy: shoe-leather costs, money illusion, menu costs, wealth...

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