The increased costs of making transactions that arise from the public's efforts to avoid the inflation tax are what type of costs? A. Money neutrality B. Menu costs C. Shoe-leather costs D. Redistribution of wealth

## Step 1<br />The problem is asking us to identify the type of costs that arise from the public's efforts to avoid the inflation tax. The options provided are: Money neutrality, Menu costs, Shoe-leather costs, and Redistribution of wealth.<br /><br />## Step 2<br />Let's analyze each option:<br />- Money neutrality refers to the idea that changes in the money supply only affect nominal variables and not real variables.<br />- Menu costs are the costs to a firm resulting from changing its prices.<br />- Shoe-leather costs are the costs of reducing money holdings to avoid the inflation tax.<br />- Redistribution of wealth refers to the change in wealth among different groups in the economy.<br /><br />## Step 3<br />From the above analysis, it is clear that the costs that arise from the public's efforts to avoid the inflation tax are referred to as shoe-leather costs.