The Menu Cost of Inflation Arises Since

Multiple Choice

The menu cost of inflation arises since

A) people hold less currency if inflation is positive and thus they take more trips to the bank
B) the central bank eventually has to restrict money supply and this causes an increase in the unemployment rate
C) lenders are less likely to give out loans and this has a negative impact on economic activity
D) resources have to be devoted to marking up prices and changing vending machines and cash registers
E) real wages and real money holdings lose purchasing power