If During the Past Decade the Average Rate of Monetary

Multiple Choice

If during the past decade the average rate of monetary growth has been 5 percent and the average inflation rate has been 5 percent, everything else held constant, when the Bank of Canada announces that the new rate of monetary growth will be 10 percent, the adaptive expectation forecast of the inflation rate is ________.

A) 5 percent
B) between 5 and 10 percent
C) 10 percent
D) more than 10 percent