If the Actual Rate of Inflation Turns Out to Be

Multiple Choice

If the actual rate of inflation turns out to be higher than the expected rate of inflation,what happens to the growth rate of output before expectations are updated?

A) The growth rate stays at the Solow growth rate.
B) The growth rate is higher than the Solow growth rate.
C) The growth rate is lower than the Solow growth rate.
D) The growth rate could go up or down.