The costs of inflation to households and firms due to holding less money and making more frequent trips to the bank are known as

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Quizplus · Accepted Answer

The best choice is D, as the costs of inflation incurred by households and firms due to holding less money and making more frequent trips to the bank are referred to as shoe-leather costs. Seigniorage refers to the profit that a government makes by printing money, while menu costs refer to the costs of changing prices, and velocity costs are associated with the relationship between the money supply and the velocity of money.

The Costs of Inflation to Households and Firms Due to Holding