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.

a. A jeweler observes the price of gold rise and wonders if there is a shortage of gold.

Costs imposes by Inflation: Price confusion

b. Carson is angry because the price of donuts increased from $1 to $2 since last week

Costs imposes by Inflation: Menu costs

c. Your grandmother's savings account pays 2% interest, but inflation is 5%.

Costs imposes by Inflation: Wealth redistribution

d. The CEO of GM worries that his revenue received in the future won't cover the expenses he incurs today.

Costs imposes by Inflation: Not associated with listed cost

e. Jim is reluctant to sell his stocks at the end of the year.

Costs imposes by Inflation: Not associated with listed cost

f. John thinks his new salary in NYC will increase his standard of living

Costs imposes by Inflation: Money illusion

g. Kallie is taking more trips to ATM now that the post.

Costs imposes by Inflation: Shoe-leather costs

being born in poverty would limit the people's chances, opportunities and benefits.

this happen because of several things, such as:

- poor people tend to gain less access to good education and nutrition. this mean that their chance to obtain high paying jobs would also be limited.

- poor people tend to socialize with other poor people while the rich tend to socialize with other rich people. this means that simply throguh their social circle, rich people would have more business opportunities compared to the poor people.

- rich people tend to have more capital in their disposal. this would benefit them in business since it is far easier for them to fund their business operation compared to poor people.