Why Is There a Resource Cost Associated with Inflation

Multiple Choice

Why is there a resource cost associated with inflation?

A) because unemployment increases when there is inflation
B) because most workers end up working fewer hours during periods of inflation
C) because consumers, workers, and firms devote resources to protecting themselves from the financial costs of inflation
D) because the existence of inflation discourages people from placing their savings in interest-bearing accounts, where it is needed to fund capital investment