Which of the following is NOT a social cost of inflation?
A. The money that people hold loses value due to the inflation tax.
B. People hold smaller real balances and so have to make more frequent trips to the bank.
C. Firms have to spend money to change prices more frequently.
D. Inflation leads to greater variability in the relative prices charged by firms.
Ans: A. The money that people hold loses value due to the inflation tax.
Economics
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a. c and e. b. d and e. c. depreciated. d. appreciated. e. helped U.S. exporters.
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