There Is an Inverse Relationship Between Real GDP and Inflation

Multiple Choice

There is an inverse relationship between real GDP and inflation because

A) an increase in inflation leads to a higher interest rate, which leads to an increase in real GDP.
B) an increase in inflation leads to a higher interest rate, which leads to a decrease in potential GDP that causes real GDP to decline.
C) an increase in inflation leads to a higher interest rate, which leads to a decrease in real GDP.
D) an increase in inflation leads to a lower interest rate, which leads to a decrease in real GDP.
E) a decrease in inflation leads to a higher interest rate, which leads to a decrease in real GDP.